Whether you own a small or large business, there are two big problems that decision-makers face when it comes to business insurance. In my 35+ years as an insurance broker in New York, I’ve seen this over and over and the problem has really been created by the insurance industry itself.
The first issue I want to talk about is figuring out what coverages you and your company needs and what you actually have. In my experience, decision-makers of firms of all sizes; from small Main Street-type businesses to large industrial companies have no reliable means of understanding what risks they are exposed to and what insurance protections they have to cover those risks. Sure, they may have a bunch of policies, and their agent says they’re “fully covered”; but does the protection they buy match up to all the risks they actually face?
In most cases, unfortunately, the policies don’t reflect the required or needed protection. I know this because one step of our process is to audit/review existing policies and in 95% of the hundreds of reviews we’ve performed we see glaring examples of key coverages missing.
Why does this happen?
I think it happens because the insurance industry has become so conditioned to believe that the bottom line price and being the cheapest is the most important element in winning new business deals. Sure, having a competitive price is important, but if we overlook the fundamental reason a business buys insurance – to protect the company and to provide peace of mind for the owners of the company, then no one is really doing a good job.
How do you fix this problem?
Let’s be honest. As a business owner, you are just too busy to be an expert in business insurance, so my first suggestion is to work with an agent or broker who has demonstrated expertise by earning professional designations. Interview a few of these agents to see how they engage with a new client and if they have an actual process of understanding the risks and concerns you have and face. In my opinion, the smartest thing you can do is start by selecting the right agent or broker.
What I don’t recommend is the backward approach of having 2 or 3 brokers compete for your account and the one with the lowest price wins. I say backward because in this scenario you’re not really engaging on a holistic basis and you’re allowing the most competitive insurer to determine who your broker is going to be.
The second big problem with business insurance is that most agents and brokers are not engaging with their clients to help them manage, control or reduce risk in their companies. A fundamental truth is that companies that do a better job at managing risk, in a documented, process-driven way; will produce better outcomes – premiums will be lower, risk costs will be lower, and productivity will improve.
Yet, the one professional on your team of advisors, that you probably pay the most money to, is not able to fulfill this role of helping you manage risk. Yes, your insurance agent is likely the highest-paid advisor to you and your firm, yet they don’t help you in the area of risk management insurance New York.
This problem is really felt in the lower middle-market larger account, where the risk and insurance program has so many moving parts.
How do you fix this problem?
Again, it starts with hiring the right agent or broker first. It’s the same fix as problem #1. What expertise does a broker have to help you reduce and manage risk? What resources does a broker bring to the table? How can the broker engage with your team to produce better outcomes?
If you interview a few brokers and can’t find one that provides these services, then it’s time to move on and continue interviewing. It’s that important for larger firms to find a broker who can provide these valuable services.
Fortunately, The Coyle Group an insurance brokerage in New City, NY does provide a rich bench of resources and expertise when it comes to helping clients manage risk, and our CEO; Gordon Coyle is one of the few insurance brokers in the Greater NYC area that has earned 4 professional designations over his career. His depth of experience and expertise is unmatched when it comes to mid-market business insurance.
Want to solve the 2 big problems with business insurance? Contact us, let’s have a conversation and see how we may be able to help you!