Sunday, May 06, 2018

Delaware Business Insurance Update "Slim Pickins When It Comes To Insuring Intangible Risks" 5-6-18

In the "old days" most businesses had their value wrapped up in buildings, property, vehicles, employees, etc... in other words,  tangible risks. In today's modern, technologically advanced economy,  many businesses have their value wrapped up in intangible risks. What are some of these risks? Reputational damage, loss if intellectual property, political risk, and failure to innovate and change, are just some of the intangible risks that pose a threat to success in business.
There is an insurance problem also with these risks, as few options are available when it comes to coverage. In 2017 AON did a survey of Global Risk Management and found only 24% are deemed insurable, with the remaining partially insurable (25%) or uninsurable (51%).
To make matters worse these type of risks are hard to identify and monetize. You cannot apply a risk management application until these two items are known. Unfortunately, few business owners will take the time and effort to find out. Insurance brokers and providers are just now counseling their clients on the risk of intangibles and hoping this will build momentum to address them. The insurance industry has been known to be slow to innovate, but the pressing need to insure against these risks will push the industry to respond. Let's keep an eye on this and see what it looks like in a year. Until next time be careful out there and know your risks.

G. Kevin Nemith   CEO CNC Insurance Associates/ Hilb Group
1-877-262-3276 toll free.