Each year Bill Dougherty teaches business owners how to Avoid the 10 Critical Business Insurance Mistakes.  He motivates them to “take charge of their insurance program” to Reduce Costs and Maximize Value.

Splitting Coverage Between Agents and No Risk Control/Loss Prevention Plan

Chapter 5: Splitting Coverage Between Agents and No Risk Control/Loss Prevention Plan

This is the fifth & Sixth installment in the series “How to Avoid the 10 Critical Business Mistakes”.

If you missed any of the Program:

1. Partnering with the “Right” Agency

2. Paying Attention to Your Carrier’s Financial Performance

3. Reviewing Coverage with your Agent

4. Having a Claims Management Plan

Be sure to call or email me and I’ll send you a copy.

This month’s installment will highlight two important mistakes to avoid.

First mistake to avoid, “Splitting Coverage Between Agents”. Obviously, if you find a “10 Percenter” you won’t make this mistake. Hiring one agent for all of your insurance needs provides efficiency, consistency and economy.

We’ll talk about economy today. When the insurance carrier’s underwriter prices your business he/she allocates premium in three “buckets” e.g. expected losses, carrier expenses, and profit.

By placing all of your coverage with one agency, and one carrier, the underwriter has a larger amount of premium to work with and can be more aggressive on the pricing of your account. The underwriters call it “total account underwriting” and you can control your insurance costs if you avoid this mistake.

This month we are adding a second mistake that you need to avoid,
“ No Risk Control/Loss Prevention Plan”.

When you write a check to the insurance carrier you are paying for three (3) services:

  1. The agent’s expertise in creating and negotiating your insurance plan.
  2. Quality claims handling
  3. The insurance carrier’s Risk and Loss Control Services

We all know that proper safety training and monitoring reduces accidents. But what many people don’t recognize is that an effective safety program, coordinated with your insurance carrier, will positively affect the coverage and pricing of your insurance program. Be sure to work closely with your carrier’s loss control representative and coordinate his/her activity with your safety program. You will reduce losses, positively impact your insurance costs, and receive value for your insurance dollars.

We have an obligation to be sure that the men we send out to our job sites everyday return safely home to their families each night!

Use all of the facilities and services that are available to accomplish that goal!

Obviously, there is a lot more to discuss on this topic. This is an “executive
summary” of Chapters 5 and 6 of a two hour seminar.

If you would like additional details just give me a call.

Don’t miss next month! We’ll cover a mistake to avoid that can save you significant insurance premium dollars – “Managing Your Workers Compensation Program”.

Carpe diem,

Bill Dougherty, EVP
True & Associates