Business Insurance
5 New Year’s Resolutions Risk Managers Should Consider
December 20, 2021
Risk managers always have plenty to consider. Based on our discussions with clients this past year, our risk advisors offer the following five risk management New Year’s resolutions that might be helpful in 2022, depending on the needs of your organization.
1. Consider Whether a Captive Is Right for Your Company … If You Have a Good Risk Record and Are Tired of Rising Premiums.
When a company feels it has no control over its continually rising insurance premiums or that its good risk record isn’t being rewarded, but it isn’t ready to risk or cannot afford to become wholly self-insured, what can it do? If it faces unique risks that commercial carriers aren’t willing to insure or will insure only at prohibitively high costs, what then? For some companies, a group insurance captive might be the answer.
In simple terms, a captive is an insurance company created specifically to serve the needs of a like-minded group of insureds, such as an association or an affinity group. For example, a state association of manufacturers could establish a captive for its members. A group of inner-city small business owners, Latino primary care physicians, or boating enthusiasts could do the same. The members of the group own the insurance company, fund its loss reserves, and control its operations to benefit each other.
2. Strengthen Your Employment Practices Risk Management … If You Are Concerned About Employee Lawsuits.
It is difficult to keep pace with employment regulations during the best of times. These are not the best of times.
Social activism and a highly polarized political climate have exacerbated already well-established HR challenges. Add a pandemic to the mix and it becomes almost impossible. Reductions in workforce; remote workforces and policies; reorganizations; COVID and post-pandemic reopening exposures; and workforce vaccination mandates, exceptions and accommodations are a lot to manage.
What can and should employers be doing to strengthen their employment practices risk management and reduce the risk of employee lawsuits?
3. Constantly Prepare for Cyber Events … If You Want to Be Able to Act Quickly.
Many company leaders believe that their businesses are unlikely targets for cybercriminals. They believe they’re too small, or they don’t have the personally identifiable information criminals want or any number of other reasons—all of which are unfounded. Today, every business is at risk for a cyberattack, no matter how well-protected it may be.
When that attack comes, the company will need to implement its incident response plan. What happens next depends on whether that plan is a living document or is something housed in a dusty three-ring binder, or worse yet, somewhere on the encrypted network.
Are you ready?
4. Maximize Your Company’s Value First … If You Are Anticipating Selling Your Business.
As the saying goes, you only get one chance to make a great first impression. When selling a business, that first impression impacts the price, how many and what kind of potential buyers compete for it, how long the sales process takes and even whether a sale takes place at all.
Doing everything you can upfront to demonstrate your company’s value, rather than allowing potential buyers to drive the conversation, will enable you to negotiate from a position of strength. Preparing your business and preparing your deal team appropriately will pay dividends when the deal successfully closes.
5. Understand Your Duty of Care … If Your Employees Are Traveling Again.
COVID-19 changed everything. That includes business travel risks and liabilities.
Employers have a legal and moral obligation to look after the health and safety of their employees. This is referred to as “duty of care.” There are many ways to interpret duty of care, but business travel and global mobility absolutely heighten the obligation employers have to keep employees safe. Business travel also increases the exposures a company may have in its duty of care strategy.
Although there are still travel restrictions and travel hesitations, those organizations that are restarting their business travel are definitely going prepared. There is a more concerted effort to keep employees safe when traveling.
Bonus Resolution: Employ Smart Broker Selection Strategies … If You Are Unhappy with Your Current Broker.
There are many reasons companies decide to switch their insurance coverage to a different broker. Often, it’s frustration with a premium hike from a carrier the broker represents. At other times, it may be dissatisfaction with some aspect of the service provided by the broker’s team. Sometimes, it’s just a desire to shake things up.
No matter the motivation, companies find themselves trying to identify potential brokers and determine ways to compare the coverage and other services each offer. Without experience or practice in the selection process, they settle on approaches such as simply requesting premium quotes or issuing complex requests for proposals (RFPs).
There are more effective and more strategic ways for companies to choose the insurance brokers who will best address their needs and culture.
Hylant clients know that their broker has their interests covered. If you would like to speak with someone about your business insurance or employee benefits needs, contact Hylant.
The above information does not constitute advice. Always contact your insurance broker or trusted advisor for insurance-related questions.
