Annual “Checkups” for Your Business
Many of us make it a point to see our doctor for an annual
medical checkup. This is an important opportunity to have a medical
professional assess the current condition of our health. It also allows us
to ask questions of our doctor about medical issues or concerns, and it is a
chance to consider making changes to accommodate a healthier lifestyle.
When was the last time you turned to your insurance provider
for a similar checkup of your business insurance and risk management
programs?
Get an insurance “physical”
As your business changes and grows, so do your business
insurance needs. It is a good idea to consult your insurance professional,
at least annually, to review your insurance coverage in light of changes
your business may undergo from year to year. For example:
You may have
purchased or sold buildings, personal property, or vehicles.
You may have
experienced fluctuations in payroll or sales receipts as business conditions
change.
You may have
undertaken new operations or developed new products or services.
You may need
to respond to new legal or regulatory issues.
An annual review—or “physical exam”—of your insurance
coverages helps ensure that coverage purchased last year adequately protects
you today. Annual reviews are a good time to consider, for example, whether
your policy limits are sufficient to replace damaged property. They provide
you and your insurance representative an opportunity to discuss insured and
self-insured exposures, as well as consider any new exposures that can
impact your current insurance program.
Annual insurance reviews are also a good time for you to
assess the performance of your current insurance provider. Are claims paid
according to your expectations? Is the insurer still financially sound and
stable? Are you receiving the promised level of policy service and
loss control support? Answers to these questions can have a huge impact on
your business and may influence your decision to continue to do business
with your current insurance provider.
Give your risk management program a “checkup”
In addition to an annual review of your insurance program,
you should also expect your insurance professional to review your business
risk management strategies on a yearly basis.
A thorough review of your risk management plans can help you
and your insurance representative identify new exposures or operations that
were not contemplated by your current programs. It provides you an
opportunity to gauge the effectiveness of your current risk management plans
and also uncover patterns in your loss experience that suggest the need for
additional risk control attention. Finally, an annual review can help you
determine if you are appropriately targeting resources to risk control
programs that have the greatest impact on your bottom line.
An annual risk management review may have other indirect
benefits as well:
Help protect
your future insurability by controlling losses and reducing claims.
Provide cost
savings through reduced insurance premiums.
Trim
expenses by reducing the hidden costs associated with claims—such as lost
productivity, additional costs for hiring and training, and lost goodwill.
Assist in
creating a safer, more favorable work environment to attract and retain
high-quality employees.
Your recommended insurance carrier, Federated Insurance,
provides an Annual Client Review
SM and a Risk Control ReviewSM
for each insured business each
year. These reviews are part of the Company’s Major Client Service
Standards.
You should expect your insurance agent or company to visit
with you annually for a check-up of your insurance and risk management
programs. You may find annual reviews are the best prescription for
maintaining the health of your business.
