Size matters - when it comes to purchasing insurance

I came across an interesting report issued last year by the National Association of Insurance Commissioners, NAIC. This report was commissioned by the commissioners to get a pulse on business owners, particularly small business owners, and their respective insurance buying habits/priorities. While this report contains a veritable treasure trove of data, to the delight of the info geeks among us, the portion I am highlighting addresses the size of small business when they choose to purchase different types of business related insurance. The survey contacted small business across a broad related spectrum, specifically with 100 or less employees. Over 90% of business contacted had property and liability insurance. Of these, only 48% had some type of commercial auto insurance. This suggests two things, either these business didn't have any type of commercial auto exposure, or they were relying on their personal auto coverage to get them by. While I'm not going into the areas of coverage lacking in a personal auto policy vis-a-vis commercial auto insurance, it is interesting to note the increase in purchase of coverage when companies expanded, i.e. increased employees and/or revenue. The same held true in relation to the purchase of workers compensation. While this report touches on many other areas relating to small business insurance buying habits, it's interesting to note the apparent increase/urgency in insurance buying habits as a business expands. It seems an increase in assets requires a corresponding increase in risk management/risk transfer applications and their relative importance to the business expands as well.

Comments

Post a Comment

Popular posts from this blog

Delaware Legislature Preparing To Revisit Dram Shop Liability

Here we go again. Representative Peterson is preparing to introduce limited dram shop liability for consideration. The legislation caps the liability at $250,000 but, as is usually the case, this creates a starting point where limits are eventually increased once it's decided by the powers that be that the current limit is too low. This also puts restaurants, bars, etc, at an increased risk due to the vague wording of the legislation, specifically "reckless" sale of alcohol by the business. Also, you can be sure that if this legislation is passed, that rates will go up commensurately for not only Liquor Liability coverage, but if actual damages begin to be paid out under this law, that insurance rates on the whole will see an increase.
Read more

Get employees back to work quickly to keep work comp costs down

Image
In the past I have spoken to clients regarding a particular workers compensation claim affecting them and have asked if they have brought the employee back to work yet. Too many times the answer is no, they have nothing for that employee to do since said employee is not 100% and unable to perform their specific job prior to their workers compensation injury/claim. The problem with this is that too often employers miss the point that even though an employee can't perform in the position they were in prior to their injury, it behooves the employer to create some type of alternative task/job the employee can do until such time they are able to resume their normal duties. Bringing that employee back to work means that work comp benefits /payments in that particular claim are being curtailed, thereby saving the employer potentially more being paid out, while adding to their experience mod and driving their overall work comp expenses up.
Read more

Important to notify insurance company of potential liability claims

Image
When trying to manage their insurance policies, many business owners make the decision not to turn in potential claims and decide to take care of them on their own. By paying for small claims, such as property damage, etc, they strive to keep claim frequency down and in turn keep renewal premiums down. One area of insurance they should not try to manage though is potential liability situations/claims. Most policy conditions require prompt notification of any potential liability claims to the insurance company and if a claim isn't turned in promptly, the policy language does note that the company can deny a claim due to late notification. It's important to do this early on since information/memories are still fresh and it gives the insurance company time to completely investigate the potential claim. The potential for a liability claim is most likely the small business owner's greatest area of risk, whether they operate a restaurant, cleaning service or any other busi...
Read more