Business owners and company executives need to conduct regular reviews of their risk exposures to ensure compliance with the regulatory framework that they operate under.
Insurance programs can become “stale” if not regularly reviewed. By stale we mean that they are often renewed year after year without the proper attention paid to them.
Your business may have grown, but has your insurance program kept pace with your business and grown with it?
Are you retaining risks that would be better off insured? For example:
- Through being under-insured (E.g. are your sums insured adequate?, will the Co-Insurance condition of a policy be applied if a claim occurs?).
- Are your sums insured / limits of liability or other policy sub-limits adequate? (E.g., do you have sufficient cover if your premises are burgled?).
- By not-insuring (E.g. you elect not to insure certain risks – insuring a Motor Vehicle for damage to third party only rather than comprehensive cover).
- Do you understand how the policy deductible or excess will affect claims?.
We know and understand that you may consciously choose to retain a level of risk, however we are concerned that you may be retaining some risks without fully understanding that you have retained them or making a deliberate decision to retain them. We recommend reviewing your risks annually, as a minimum, and use a comprehensive checklist (Uninsured Exposures Review) to discuss these with you.
A further concern is the possibility of the aggregation of self-insured risks which, in the event of an incident giving rise to a variety of claims, could lead to a combined loss figure well above the acceptable level of retention (eg, a fire or explosion at a major location could involve Fire, Business Interruption, Motor Vehicle and also Cargo on vehicles parked, not to mention Legal Liability for injured workers or third parties).
Are you considering purchasing a business as a going concern? Financial and legal due diligence is usually conducted by your accountants and legal advisers. Have you considered a similar process to review the current insurance policies of the prospective purchase to ensure that the existing policies are adequate and protecting you from potential liabilities after the purchase?
We can conduct a thorough review of either your existing insurance arrangements or those of a prospective purchase and will provide a written report of our findings.