Knee Jerk Rate Changes are on the Horizon

I have been in this industry for over 25 years. I continue to scratch my head on how the rate cycles of soft and hard markets continue to be part of this business. However I find myself confused. For the last 5 years the industry has been in a soft market and rates have fallen. This has been good for my clients, especially during this tough recession. 2009 and 2010 should have been the years that the insurance companies would have started to slightly raise rates to cover the growing number of losses that are developing. Rates however are continuing to fall. I am warning my clients to get ready for the knee jerk reaction of rising rates that the industry is most likley going to do. Instead of a discipline approach to proper rates to cover losses, I will most likely be trying to explain to my clients why rates went up 25% overnight.  This is the one of the most frustrating  things that I deal with as an agent/broker. Oh well, the day is arriving soon and I am getting ready to try to explain to my clients what is going to happen. The good news is I have a lot of companies to choose from so competition will lessen the pain for my clients, but no matter knee jerk rate increases are coming. Stay tuned.  Until next time be careful out there and know your risks. K

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