Getting your company to the point where you have the ability to make choices on insurance is a great thing. You are no longer at the growth stage where you are only focused on “bare bones” statutory insurance needs, but rather you can choose which exposures you really feel you need to insure. Worker’s Compensation is required for every company that has employees, there is very little choice in that, however do you really need to insure every piece of equipment you have? Do you need to carry physical damage on all of your cars? These are all choices that a business owner has.
Many business owners assume that every exposure should be insured against if the budget allows it, but is that methodology right? Should an insurance policy be the last resort when all other options have failed? There are so many different ways to manage risk and an insurance policy is only one of them.
At some point, every business enters into contracts where risk is transferred from one entity to another. General contractors transfer risk to their sub-contractors, manufacturers transfer risk to their distributors or vice-versa. Is your business properly using risk transfer mechanisms?
Is it possible to completely mitigate a risk if it is properly loss controlled? Can you put safeguards on machines, move that errant extension cord, hand out safety goggles, install location devices on trucks, and an endless list of other things that will bring your level of risk down?
Are you engaged in activities that maybe you don’t need to be involved in? Can you outsource those activities to someone else? Can you completely remove a certain exposure that you don’t need to be burdened with? It’s never a great situation when a loss happens, but it is a relief when you can point the finger at someone else.
Trading money with an insurance company can make a lot of sense when controlling certain risk, but more than likely, it doesn’t make sense for all of your business’s risk. Is that brand new $5,000 piece of machinery something you could maybe self-insure? Would your personal tolerance of risk allow that?
Every business owner can find an insurance broker who can deliver a great policy at a great price, but does every insurance broker view an insurance policy as the last resort instead of viewing it as the only choice? At CRS, we are advisors with a large base of experience to share to support you prudent evaluations of your unique situation. Let’s talk.
Start having conversations this week about all of the other ways you can manage your company’s risk. Even a quick email will bullet points can get you started with your own team and your insurance professionals.