When selecting an insurance brokerage and structuring a risk management plan, Chief Financial Officers (CFO) need a clear perspective on how and where that plan aligns with the business's short and long-term goals.
Here are the top 5 insurance tips for CFOs to help select the right insurance brokerage and coverage:
Credit Quality: A.M. Best rates insurance companies on their financial strength. You should not choose an insurer with less than a A+++ or A+ rating. Insurers should have a record of prompt claims settlements and payments.
Risk Tolerance: All risk not financed, avoided or reduced is thereby retained by your business either actively or passively. Your risk manager should be making you aware of both insurance and non-insurance ways to mitigate your risk. This could be as simple as coverage placement, machine guarding or contract language. If you don't know, ask! A large uncovered claim could be detrimental to the balance sheet.
Reliability: Are the presented insurers and the brokers credible? Do they deliver even the small promises they make? Do you feel like you are treated the same as a multi-billion dollar company would be? If not, you should be thinking of change.
Communications: Do you have clear and reliable communication channels with your brokerage team? Do you know who to contact with a general question, a claim or a certificate request? Is your broker communicating information that is relative to your business? Were all of your concerns adequately addressed, or were they glossed over during the presentation?
Knowledge: Insurance lingo, coverage, case studies, bench-marking, and procedures can all be looked up, but is your broker taking the time to understand your business? Does it seem like they are asking a lot of questions? Does your broker ask you uncomfortable questions, or are they skirting around the issues to get a quick sale? A reputable insurance brokerage will ask a lot up-front in order to gain a better understanding of where your business is and where it is going.
If you have not experienced all of the above, consider partnering with The Plexus Groupe. We value long-term relationships and we know that starts with you.
Matt Wilkens, ARM, can be reached at mwilkens@plexusgroupe.com or by calling 847-307-6157.
