Best in class firms pay less for their insurance than their peer group. Why? They look at things differently. A safer firm retains talent and with less turnover, you have happier customers and ultimately experts share stats that better run firms pay less for their risk and are more profitable.

Below is a list of things you can to do reduce your cost of risk. There are some other nuanced ways to do more that are industry specific, take a look at these as a starting point.

1. Attach copies of inspections, sprinkler reports, alarms details, snow removal contracts, records of maintenance for both your property and your equipment. This is for each location!

2. If you use equipment, list your machinery, microscopes, testing equipment, welders, cranes, whatever your equipment consists of. If you have redundancy highlight this so you can reduce your business interruption (BI) costs.

3. Share information about your suppliers. If you can show you have back up suppliers in different jurisdictions you help reduce your BI costs. A flood or wildfire in one part of the country will not disrupt your operations because you have your plan B, further reducing your Business Interruption (BI) insurance costs. Details on how often you visit your suppliers’ locations improve your risk profile. Also reduces regulatory obligations on owners & C-suite.

4. Include copies of your contracts with details of your customers. If you have any hold harmless or waivers that reduce or limit your liability, highlight this. Design your PO to limit your liability to the invoice cost. If you work with your lawyer and share this with your insurer, they will reward you with lower costs. Perhaps you do installations and have a factory sign off to confirm all was in good working order when you leave a customers site.

5. Do you ask for a copy of your supplier’s certificate of insurance (COI). This gives you details about their coverage. Being named as an additional named insured gives you rights on their policy with respect to the work this supplier or sub is doing for you? This extra step gives you privileges on their policy and includes notification if the insurer cancels coverage or your supplier misses payments.

6. When is the last time you googled your firm or reviewed your website. Are you showing up the way you want or is a past lawsuit or some negative comments about your firm the first thing you see? You can clean this up but know, underwriters look at this before they do anything else.

7. Do you compete a statement of values (SOV), a business interruption work sheet? (BI). Do you provide drivers list, abstracts, radius of operation details?

8. What controls do you have in place from a cyber risk, financial, employee or customer theft aspect? How often do you do an inventory or reconcile a bank statement? Share your best practices with your broker and underwriter.

9. What certifications do you have, what degrees and years of experience does your team have? Share that. Brag about your expertise.

10. Turnover, are your sales increasing or are the cost of goods/tariffs your challenge. This can be a very interesting conversation with your underwriter to see if you can further reduce your cost of risk.

Ultimately, your insurance policy is a contract between you and your insurer. Look at it like a bank loan. The more they see you doing, the more comfortable they are to be your partner. You want them to visit and give you feed back.

Be transparent about past issues, what you have done to mitigate claims and if you share your information with pertinent documentation you will ultimately make life easier for an underwriter to decide if they want to offer you coverage. Your goal is to create competition in the marketplace which is the best way to reduce your cost of risk and make you more competitive so you can continue on your growth journey.

Written by Judi Smith
JLS Consulting Services
Judismith007007@gmail.com
647-204-1227