10 tips to improving value in your insurance portfolio
October 12, 2015 The NonProfit Times
How much do you know about your organization’s insurance portfolio? What sort of value are you getting? For those who may respond with a shrug, Scott R. Konrad, senior vice president and not-for-profit business practice leader at HUB International Northeast Limited presented “10 Practical Tips to Sharpen Value in Your Nonprofit’s Insurance Portfolio” at the 2015 Risk Summit.
Konrad’s tips included:
* Consider the big picture. Calculate the total cost of risk from a variety of different sources including non-covered claims, payments exceeding available insurance, workplace inefficiencies, declining morale and loss of reputation and funder confidence.
* Think strategy first and insurance last. First look at the risks your organization faces, their frequency, severity and worst-case impact. Then consider means of avoiding and reducing risk before evaluating transferable and retainable risks.
* Think outside the box. Nontraditional risks are seldom covered by traditional insurance. Emerging risks include sexual misconduct and professional liability.
* Sweat the details. Understand what you are buying and read the fine print. No two policies are created alike. Common traps to consider include liability coverage for individuals in non-owned vehicles, inadequate crime protection, professional services exclusions and exclusions and limitations to water damage coverage.
* Avoid bidding out insurance. Broker selection allows for a single broker to represent organizational interests and promote a consistent message in the marketplace. Marketing, on the other hand, is capable of fragmenting the marketplace and emphasizes going-in price over long-term risk costs.
* Start early. Begin insurance portfolio planning 120 days in advance. Communicate continuously with your broker, allowing time for insurer analysis and minimize opportunities for timing-related excuses.
* Showcase your organization’s strengths. Share your internal risk management infrastructure, corporate safety initiatives and lessons learned from prior claims.
* Meet your underwriter. You’re the best at telling your story and strategic partnerships will prove valuable through market cycles.
* Treat your broker as a partner and extension of your team, not a transactional intermediary. Give your broker a seat at the table when discussing new ventures, contracts, operational changes and shifts in strategic direction.
* Know the deal. You can’t assess the value of a service without understanding its costs. Insist on complete operational and financial transparency.