Insurance Strategies: Top Tips from the Experts
- Oct 22, 2013
Navigating insurance policies can be a challenging exercise for commercial real estate executives. Although the basic elements of coverage remain much the same from year to year, factors that influence limits, deductibles and rates can vary.
Following is a short list of best practices offered by a variety of underwriters, carriers and real estate professionals. For more about insurance strategies, read “Unsettled Forecast” in the November 2013 issue of CPE.
- Find carriers and agents that have a track record in commercial real estate. Insurance covers everything from homeowners and drivers to directors’ and officers’ liability, and not every company is equally strong in every specialty.
- The devil is in the details. The people that are pricing and providing insurance are detail-oriented, so the more information you can provide about your business and your needs, the better off you’ll be.
- Don’t wait until the end of the year to renew your policies. Many companies schedule renewals to coincide with budget season, but that is also when insurance carriers are the busiest. If you renew earlier, you’ll have the benefit of more time and attention from brokers and underwriters, and that may result in coverage that better suits your needs, plus lower prices.
- Get your options at least 30 to 45 days in advance of the renewal deadline. You don’t want to find yourself making crucial decisions at the last minute.
- In your renewal meeting, ask your broker and underwriter whether it makes sense to reduce limits in any areas in exchange for a higher deductible. A careful review may be able to lower your premiums without significantly increasing your exposure.
- Treat your insurance underwriters and agents like partners, just as you would your other important consultants. For example, making an effort to understand their cultures could result in better service. And developing a relationship with those specialists will pay off if you should ever need their help with a major problem.
- When it comes to risk exposure, avoid magical thinking. Always assume that an improbable event can actually happen, and keep that in mind when choosing insurance policies and other risk management strategies.