RISK SERVICES—Teams can do great things.
Teams can accomplish tasks that individuals cannot do on their own or that would take them a lot more time to do by themselves.
Teams also take advantage of the strengths of others, with each person adding unique talents and skills to benefit the group.
At your company, you probably already have some types of teams.
You may have a management team, an office team, and a safety team. Perhaps you even have your own baseball team — if only just for fun, exercise and employee bonding.
Depending on the size of your company, you may also have a Risk Management team. Or maybe not.
Many businesses remain unaware of the vital need for professional Risk Management services and the value they bring to your company’s operations and overall team.
Coverage Needs Change
Did you or someone else at your company purchase your commercial insurance policies years ago and now just renew them annually?
That’s a common scenario. But as your company grows and changes, your coverage needs also change.
If you don’t have someone specifically trained to handle insurance programs and address evolving risks — you could be endangering your company’s future.
Claims could be denied. Co-penalties could be applied. Some items could be doubly-covered, while others may have fallen into a coverage gap.
You’re probably missing out on savings opportunities, too. (Savings? You might be surprised to see this option. You realize rates and premiums go up, but may have never imagined they can actually go down, too.)
Your policies should be reviewed by an expert and updated accordingly before being renewed. (And renewal time is a great savings opportunity.)
Risk Management Role
Mid- to larger-sized companies frequently use consultants to handle risk and insurance programs when they can’t afford to hire a full-time Risk Manager.
Independent Risk Managers make GREAT team players.
- They work EXCLUSIVELY for their clients.
- They have YOUR BEST INTERESTS at heart.
- They’re your ADVOCATES in the insurance marketplace.
Plus, they sit on your side of the table during negotiations. And they can even assist you in bidding out your entire program for the best results.
Risk Experts Match Exposures To Coverages
Risk Managers are well-trained in sizing up the exposures for your business and then designing an insurance program to match its specific needs.
You’re also going to get the benefit of their experience with other companies like yours and their knowledge of the ever-changing insurance marketplace.
And while they may know many brokers and insurance agents — they’re not beholden to anyone, because they work independently.
And because they’re independent, they’ll help you CUT COSTS instead of needing to be paid out of the premiums charged to your company (like brokers and agents).
Insurance Program Design AND Savings Specialists
Risk Managers are not only good at designing insurance programs to fit your specific industry or service, they’re also good at finding savings in multiple places.
SERVICE and SAVINGS are what they do on a daily basis. They know how and where to find savings solutions for coverages, policies, limits, deductibles, workers’ compensation and more.
And Independent Risk Managers can usually find more than enough insurance savings to cover your fees for hiring them.
Sounds like a pretty good deal, right?
With a Risk Manager on your team, you’re going to get MORE for your MONEY:
- You’re going to get better coverages for your company — giving you MORE peace of mind.
- You’re going to end up paying less for your commercial insurance programs — giving you MORE savings.
- And with a Risk Manager handling insurance-related issues, you’re going to save a lot of top-management time — giving you MORE time to devote to other business matters.
If this sounds like a win-win situation to you, we’d love to join YOUR TEAM.
We have a 40-plus-year track record of helping businesses and industries in Alabama, Arkansas, Louisiana, Mississippi, and Tennessee.
We love helping our clients REDUCE RISKS and INCREASE SAVINGS.
Let’s talk. About your company. About your needs. And about the world of possibilities created by great teamwork.
Call Us To Hear MORE Risk Management Team Benefits!
(Photo Credit: Chazz H.)
RISK SERVICES—I’ve heard the Risk Managers in my office mention more than once that “too much shopping around” with your commercial insurance policies is a bad idea.
At first, I was just curious as to why. But then I thought business owners and top managers might be interested, as well. So, I asked them to explain.
Here are several reasons why Risk Managers advise against taking your policies “to market” on an annual basis.
Why You Shouldn’t Market Too Often
1) The Underwriters And Agents Don’t Pay As Much Attention To Your Account.
Prep work on commercial insurance accounts takes time. Agents and underwriters may not want to compile all the information necessary to quote an account, if they feel their efforts won’t be rewarded.
2) Your Account Is Just Out There Too Much And Nobody Will Take You Seriously.
Agents could believe you’re just looking at the rest of the market and have no intention of changing agents. They may feel that you just want to look at the available policies, but you’re not going to buy anything.
3) It ‘Cheapens’ The Account. It’s Not Worth Anything.
You cheapen the value of your account if you bid it out every year or two. Agents can decide to focus on other accounts that don’t bid as often or they may choose to not put as much time into your account.
Do This Instead — Accept Bids Every 3 to 4 Years
If you only bid out your commercial insurance account every three or four years, for example, then agents and underwriters will understand that this is their opportunity to quote your insurance.
And they’ll realize they have a real chance of securing the account.
“From a Risk Management standpoint, we advise our customers to only bid out their commercial insurance accounts every three to four years, unless there is a complete turnaround in the market or another direct reason to look at more coverages or policies,” said Walter Haney, Sr., of American Risk Managers, Inc.
Mr. Walter also shared some advice on reasons to make policy changes, how many agents to get involved in the quote process and some best practices for bidding out accounts.
Have Specific Reasons For Change
All of your insurance purchasing should be based on coverage needs.
“There needs to be a specific reason for buying a particular type of insurance,” Mr. Walter said.
For Example, Risk Managers can survey your operations to check for risk exposures and then design a program to fit your company’s unique needs.
Mr. Walter also noted that there needs to be a reason to secure different pricing.
“If there’s some reason to believe that the pricing is going to go up, then certainly you want to shop that policy,” he noted. “But we don’t believe you should be changing agents or companies just to be doing it.
“We think there has to be a meaningful difference in pricing. And to us, that’s 10 percent. There would have to be a 10 percent savings opportunity for us to advise a client to change agents.”
Pricing Is Not The Most Important Consideration
Also, regarding pricing, Mr. Walter noted that it’s neither the least important reason to change, nor the most important consideration.
“The most important thing is coverage,” said Walter Haney, Sr. “If you have a claim, is it covered? If it’s not covered, it doesn’t matter what you paid for it. You don’t have anything.”
Besides coverage, other important considerations to keep in mind are company reputation, agent experience and how well the policy is written.
Another reason for a change mentioned by Mr. Walter would be if your insurance company was closing or relocating.
“If your company is leaving the area, then you want to be ahead of that to shop the insurance,” he said. “But if everything remains the same, the best practice is to have your account quoted every third year.”
How To Go About It
Establish Values & Limit The Number Of Agents
The first step in bidding out a commercial insurance account is establishing the values of all your properties and equipment.
(Again, we’ll recommend getting a Risk Manager involved, but a detailed list of how to prepare your accounts can be found here.)
Mr. Walter noted that establishing values and publishing specifications allows every agent involved in the bid process to have an equal chance.
He also explained that you should limit the number of participants to three or four independent agents.
Why no more than three or four?
“You destroy the market and overextend it when you go overboard,” he said. “Three or four agents will give you a good search of the market and allow those agents to be able to put together a complete proposal for you.
“Anything over that is just superfluous and is of no real value to you.”
Work Off Assigned Markets
While preparing your specifications, you can invite the agents you want to be involved to submit the markets they’d like to use — IF they get the account.
(Examples of markets include a company that handles property coverage, a company that offers workers’ compensation coverage, and another company that deals with automobile coverage.)
You begin by sending participating agents a market request form, so they can pick their first, second and third choices of markets.
SEE EXAMPLE BELOW
Mr. Walter explained, “If I was requesting markets, I would list as my number one preference the market that I felt would best provide the coverage for that account. You’re looking for an insurance company that does a good job with that particular type of business.”
By submitting their markets on a preferred basis, you’ll then, ideally, be able to match each agent up to their number one market — the one they really want.
“The agents are saying, in essence, ‘If I got the account, these are the markets I would like to have’,” Mr. Walter said. “It doesn’t always work that way, but that’s the idea behind it.”
You (or your Risk Manager, if you have one) will then assign all of the markets to specific agents.
Agents are advised to only work off of assigned markets and not approach any company until and unless they’ve been assigned this particular market.
After markets are assigned, you’ll need to allow the agents approximately 90 to 120 days to obtain their quotes.
Before presentation time, you’ll want to create some type of bid form on a spreadsheet, so you can compare all of the companies, the coverages, and the pricings.
Mr. Walter recommends that you have all the agents present their pricing and proposals at least 15 days prior to the expiration date of your policies.
“That way, if you do make a change, you have time to get your insurance certificates. And it’ll be a more orderly change,” he said.
Hopefully, you’ve learned a little bit about “what not to do, what to do and how to do it” regarding taking your commercial insurance accounts to market.
Of course, none of these suggestions are meant to be legal advice. You’ll always have the best results (and bigger savings) by consulting with an Independent Risk Manager.
Save Time & Money — We Can Help Bid Your Account!
(Photo Credit: Chazz H.)
(Editor’s Note: American Risk Managers (ARM) Founder Walter Haney, Sr., was asked to pen this open letter to a prospect.)
Risk Services—You know you are probably paying too much for your insurance, and you’re not sure you are correctly insured. You ask your agent and he tells you the price is right; the coverage is more than adequate.
And then it dawns on you—he designed the program and he is compensated by payment of a portion of the gross premium.
One thing you readily know is the higher the premium, the larger the portion. Lack of coverage… you will discover when you find yourself with an uninsured or a significantly-underinsured loss.
You need someone to design and secure coverage at adequate limits and at a competitive price. You advisor must not have a pecuniary interest. You need an Independent Consulting Risk Manager. I am a 41-year-veteran of this field. And I will be happy to go to work for you.
Walter Haney Sr.
I will need to get to know you and your operation. I will need to spend some time going through your assets, your claims, your sales and your future plans. I will need to check your insurance policies; looking closely at pricing, coverages, and exclusions. I will need to make notes of lack of coverage.
Once I have assembled this information, I will draw bid specifications to provide the needed protection. I will then look for brokers/agents who have service capabilities to service the account at the most competitive pricing in today’s market. In addition, I am going to reduce management worktime for this project by 85% to 90%.
And I normally reduce your premium pricing by 25% to 35%. Based on this, I think you will agree—I can help you.
To Learn More Of ARM’s Special Service For You, Please Call 800-548-0117.
(Photo Credit: Pixabay)
RISK SOLUTIONS—I won’t deny it. I love my job. My bosses are Risk Managers and they work hard every day to help protect businesses and save them money.
Part of my job is to write about Risk Management issues, so that businesses like yours—businesses that need us—can find us!
Recently, one of my bosses, Mr. Walter Haney, Sr., saved a company $12,000 on their Workers’ Compensation Insurance Premiums.
Since some companies may be unaware that simple errors can create unfounded overcharges on Workers’ Compensation premiums, I felt this situation might make a good example.
Especially because of the happy ending…this client’s Workers’ Compensation bill was ultimately turned into a refund check!
Becoming Aware Of The Problem
Mr. Walter was contacted by one of our clients when they received an additional bill for their Workers’ Compensation Premium after an insurance audit.
“They received a bill for more than $6,000,” he said. “They’d already paid around $18,000 for their Workers’ Compensation. I knew what they should have been paying based on their payroll and that something was wrong.
“I can look at your payroll and tell you about what your Workers’ Compensation Premium ought to be. I knew this client should have been paying around $11,000 or $12,000.”
Mr. Walter said he also suspected right away that a portion of this company’s payroll had been mis-assigned.
As this company deals with Waste Control, its employees are assigned to only two Workers’ Compensation Code categories—clerical and drivers.
So, his suspicions included:
- An excessive payroll amount was possibly used for the audit; and
- Employee codes were possibly mis-assigned on a portion of the payroll.
Suspicions Are Confirmed
Mr. Walter requested a copy of the insurance company’s audit work papers. When they arrived, it didn’t take long for him to locate the mistakes.
“From looking at the audit work papers, it was very apparent,” he said. “As we had suspected, they had mis-assigned a portion of the payroll and they had excessive payroll on the audit.”
But Mr. Walter didn’t stop there. He was determined that this company would only pay what it should be paying based on accurate figures.
Reconstructing The Audit
Going back to the client, Mr. Walter asked for more information. He requested all of the employees’ names and a description of their jobs. He also wanted the amount of payroll monies paid out—by employee and by classification code.
Mr. Walter checked which codes these employees should have been assigned to based on his 40 years of Risk Management experience. And then he compared it to the codes that had been used for the audit.
He also recalculated the entire payroll for all of the employees according to the correct classifications based on the work they produced.
“I did a new audit,” he said, “very much like the people who had done the previous audit. And it came out to what I thought it would be.
“Rather than owing $24,000, this company only owed $12,000 in Workers’ Compensation Premiums.”
The two mistakes that nearly cost this client $12,000 MORE dollars, but actually turned into SAVINGS of that same amount, are frequently found by Risk Managers.
“It was a combination of too much payroll and a significant payroll amount being placed into a higher classification,” Mr. Walter said. “So, it was an overstatement and a mis-classification.
“They had mis-assigned a part of the payroll to the drivers when it should have gone to the clerical part of the payroll.”
Later, the insurance company realized this mistake was due to a simple clerical error with code entries. Their software had two places that required codes—one area was for a code for Workers’ Compensation and the other area was for a code for the employee position.
And because some of the workers had been given the wrong code, two different problems were created with one error.
Workers’ Compensation Errors Are Not Uncommon
Mistakes in Workers’ Compensation calculations are not uncommon. Insurance companies can make mistakes (like this example), insurance auditors can make mistakes, and even companies sometimes make mistakes themselves.
“If the client makes a mistake, we can get that straightened out, too,” Mr. Walter noted.
Risk Managers know where to find the errors in Workers’ Compensation codes, classifications and calculations. My bosses can check for them all, including any issues with Experience Modification Factors.
Most companies have no idea that anything can be done about their Workers’ Compensation costs.
But I’ve learned that an audit premium bill doesn’t necessarily mean it’s a done deal.
“Many companies would have paid the bill, fussed about it a little bit and let it go,” Mr. Walter said. “Most clients don’t know how to redo audits and most insurance company auditors are not going to re-check their work.”
But because American Risk Managers “had their back,” Mr. Walter made sure the Workers’ Compensation over-charge was refunded. He even continued to follow up until the check was cut and mailed to the client.
“By becoming involved in the audit, by knowing how to do our own audit and by taking our client’s position on the audit, we were able to reduce their charges by $12,000 and return a net of $6,000 to them of previously paid premiums,” he said.
‘We Operate At That Level’
All of my bosses really love helping clients save money. Besides Workers’ Compensation, there are many other Common Types of Risk Management Issues that they can help your company with.
Could your company benefit from some professional Risk Management expertise? Do you use other professional services?
Mr. Walter provided a couple of examples using accountants and lawyers.
“Risk Managers work for your best interest just like accountants who are filling out income tax forms,” he explained. “If you’ve got somebody filling those forms out for you who understands tax laws, then your chances of having a mistake are almost nil.
“If you go in there and try to fill out your own income tax forms, you might get it wrong, simply because you don’t know tax laws. And that’s the reason you’ll hire a lawyer if you’ve got some sort of legal problem.
“Independent Risk Managers are just like those sorts of professional consultants,” he concluded. “We operate at that level.”
For more information on insurance audits, including other common errors and the top reasons for audit increases, please visit “Top Reasons Why Audits Increase Commercial Insurance Costs.”
And don’t hesitate to get in contact if you’re in need of Risk Management advice and advocacy.
My Bosses Can Help Your Company, Too!
RISK SERVICES – Risk Management is identifying the levels of exposure and danger a company faces in its operations and assets and then determining the best ways to offset them.
The best response to risk does not always include buying insurance. Some potential losses can be controlled, transferred, reduced or eliminated.
If you do need to insure, there are different types of coverages available. These include fully-insured, risk retention or deductible plans, and true self-insurance.
How do you know which one to choose? YOU don’t have to. That’s the job of your on-staff or consultant Risk Manager.
“But my insurance agent handles my Risk Management,” you might say. And they may do just that.
But they’re also getting a commission off your premiums.
Would they suggest you have a Cost Benefit Survey to make sure you’re getting the lowest possible price?
We would. That’s what we do.
And if you have different agents for your Property Insurance and your Casualty Insurance (and most mid-sized to larger companies do), are you sure there aren’t any gaps or overlaps in coverages?
We can do that for you. That’s what we do.
We get YOU the best insurance coverages at the best possible prices to fit YOUR needs. We act as YOUR advocate and advisor.
WHY? Because we like helping people. And we’ve made a business out of it.
RISK: That’s what we do.
Company Founder Adds Remarks
Walter Haney, Sr., is serious about helping companies with their Risk Management needs. He describes his processes, his objectives and his company’s mission in the following statement:
“First of all, with any potential client or new client, we review all of their existing insurance coverages and Risk Management Programs—dealing with safety, dealing with limits, dealing with the whole thing.
“In doing this, we are looking for gaps or overlaps. Gaps are areas with no coverage. And a no-coverage claim could put you out of business. Overlaps are simply insurance that you’re paying twice for and can’t use but one time.
“Then, after we do this, we visit with the potential client and tell him what we’ve found. And if we’re employed, we will at that time, design an insurance program to correct all of the errors and omissions that are present.
“We will help him secure the insurance through a competitive bid process. We will help him manage the insurance once he secures it. And from that time on, if they desire, we will manage and operate their insurance program.
“We will secure personnel to design safety programs to complete the whole Risk Management Support System that companies need today.
“Companies are now faced with legal exposures that they’ve never been faced with before. There are lawyers operating out there with ads telling people what to sue for. And there doesn’t have to be anything of a real nature involved to start a lawsuit.
“But, basically, what we do, if you think you want to hire us, we’ll come and take a look at what you have. And check it for the adequate coverage that you need.
And if you hire us, we’ll design an insurance program for you. And we’ll design a Risk Management Program for you that will serve your company as well as any Fortune 500 Company’s program.
“We are designed to support—our whole mission is to support—a company that is not quite big enough for a full-time Risk Management Department.
“The need is there, but from a financial standpoint, they really don’t feel like they can support a whole department. And we furnish that.
“We’ve very much like a CPA firm being used as a Financial Officer. We hire CPAs to do that for us; to make financial projections, to deal with our taxes. And that’s because companies don’t know how to handle those issues. And they hire lawyers because they don’t know the court system.
“These companies are usually equally unaware about insurance. Most companies don’t know what to do with their insurance programs. And that’s the reason ‘they give it to somebody.’ They give the insurance program to their friend or to ‘so and so.’
“And these companies have never competitively bid their insurance programs. They’re told by these agents that they’ll check 50 companies for the best prices.
“Well, that’s not good enough. You need a competitive bid situation and you need more than one vendor competing for your business.”