“How was it a normal insurance renewal during Covid-19?!?”
These were my internal thoughts when a business owner recently explained that he just finished his business insurance renewal. It didn’t make any changes from 2019. He and his broker didn’t even bother to discuss possible changes. Had I just dreamed up this entire COVID-19 Pandemic?
Unfortunately not. There is not a business under the sun that doesn’t have a different set of risks than they had last year. Some exposures have sky rocketed and others are now non-existent. In a survey of CFO’s from across the United Stated last month, Workplace Safety was their top concern. Workplace Safety isn’t cited by a single participant in the 2019 survey. (Euler Hermes Americas, 2020 Survey.)
It is incredibly important to look at your insurance renewal process this year as if it’s your first year purchasing insurance for a new company. Have your Workers Compensation classifications changed because of workers working remotely? Did you adjust your estimated gross sales so you’re not paying for more exposure than you need? What about discussing adding coverages to protect you against risks that weren’t present 6 months ago?
Many business owners and executive members have struggled to quickly process and respond to the challenges that COVID-19 has presented. These changes came quickly, ranging from regulatory, fiscal stimulation and disruptions in supply chain.
Some of the new risks companies are able to transfer to insurance companies. You will need to mitigate other risks internally and stay self-insured. Discuss some of these items:
Directors & Officers (D & O) / Employment Practices Insurance (EPL)
There is a major uptick in cases that plaintiff attorney firms bring claiming management fails to efficiently supervise their company during events. These range from COVID-19 response to Cyber/Privacy breaches. Directors and Officers (hopefully) will always do their best to sufficiently supervise their company. However, in uncertain times like this, it’s not a bad idea to discuss with your broker shifting some of the risk to an insurance company with a D & O Policy with proper limits set. With the trials and tribulations of providing a safe working environment for your employees, correctly handling leaves of absence and furloughs, it’s not a bad idea to shift some risk through a EPL policy to protect your firm from lawsuits from your own employees.
Cyber / Data Breach Insurance
With many companies utilizing a work force with many more employees working from home, a thorough conversation about how your cyber risk has changed since 2019 is critical. Again, every company should be working with IT professionals to make sure that they are taking the necessary steps to safeguard their own information as well as the firms they do business with, but it’s not a question of “if” but “when” you are victim of a cyber attack. With data breaches normally costing millions of dollars, a cyber policy can help mitigate such costs.
Business owners and C-Suite executives get worn out from trying to keep their company afloat with the new challenges we have been presented. Make sure you don’t just “go through the motions” with a normal renewal meeting this year. Every Risk Management meeting this year should feel like a “Discovery Meeting” where you discuss the new emerging risks your company faces, and how you can successfully mitigate or transfer that risk.
Here are other Covid-19 Articles you may enjoy from our members:
Curtis O'Shaughnessy
Curtis O’Shaughnessy is currently a Vice President of Commercial Lines at Leavitt Group’s Los Angeles location in Woodland Hills. Curtis specializes in Technology, Wholesaler-Distributors, Logistics firms & Manufacturers. Before entering into insurance Curtis worked as Director of Sales & Marketing for a luxury resort on the island of Maui for 9 years and owned a small property management company. Curtis grew up in Hawaii and moved to California to attend college on a golf scholarship, graduating in San Diego from California State University San Marcos with a B.S. in Business Marketing. In addition to Echelon 2, Curtis is a member of Association for Corporate Growth in both the Los Angeles and Ventura Chapters and is an Ambassador for the Valley Industry & Commerce Association. Curtis also is a coach/volunteer for The First Tee which provides underprivileged kids golf instruction and life lessons. Curtis currently resides in Westlake Village. He is an avid golf and tennis player, loves water sports, and enjoys the mountains and snowboarding. Travelling and cooking are two of his biggest passions to go along his love of sports.