If you think business insurance premiums only cover paying claims — think
again. Many business insurance carriers include a wide variety of value-added services in their premiums. In order to maximize the benefit of your business insurance, you should know what services you
receive and what options are available.
Then your insurance agent should work
with you to determine which ones best
meet your business’s needs.
“We have formed a business customer
council, which has provided tremendous
feedback on needs and perceptions,” says
Steve Fisher, CPCU, senior executive with
Westfield Insurance. “One of the perceptions is that insurance carriers pay claims
and that’s it. The premium value statement
helps change that perception.”
A premium value statement acts as a
comprehensive breakdown of the numerous benefits a company receives in return
for its insurance premium payment. This
document can help company leaders analyze the current services they receive from
their carrier and make the most effective
decisions about their choice of future carriers and services.
Smart Business learned from Fisher
about how a premium value statement is an
effective tool for evaluating insurance benefits.
What types of value-added services can be
included in business insurance premiums?
One such service is collaborative risk
control where a representative from the
business, usually the safety director or
someone charged with the safety/risk control responsibility, teams up with the insurance company’s risk control representative. These professionals work together to
design and implement policies and procedures that manage risk and reduce losses.
This proactive approach aims to decrease
the number of claims and lessen the
impact of claims that do occur. The impact
of reducing losses goes beyond dollars to
also include creating a safer workplace for
employees, reducing time away from work
due to onsite accidents, increasing driver
and fleet safety and improving other areas.
Value-added services can also include working directly with claims personnel
from the insurance company, before and
after any losses occur. Most business customers are familiar with after-loss contact,
but many business owners don’t have a
relationship with their representative
before a loss occurs. Establishing lines of
communication from the beginning of the
relationship engenders a tremendous
amount of goodwill and leads to smoother
communications after any losses occur.
Insurance carriers can also provide loss
trending reports that help determine what
safety and training programs are needed
from the risk-control area. This helps businesses focus their resources on the programs that will offer the largest return on
investment. Most insurance carriers can
also customize claim reports for their larger business customers that better match
that business’s reporting requirements.
Customized billing is another value-added service that carriers can provide. As
any business owner knows, cash flow is
imperative to success. Some insurance carriers work with mid-sized and larger customers to design a plan that aligns with
their business’s cash flow needs. Other
value-added services are available and
depend upon the premium needs of specific business owners.
How can a premium value statement help
businesses with the renewal process?
Premium value statements are designed
to outline as many of the services provided
as possible. This tool acts as a starting
point for dialogue during the renewal discussion among the business owner, agent
and insurance carrier. Too often a renewal
is delivered with an invoice without much
discussion. The premium value statement
facilitates discussion about what the insurance carrier provided and what the policy-holder truly valued.
How can a complete understanding of premiums help justify insurance premiums to
upper management?
The premium value statement helps justify the cost of insurance to upper management because it shows what services are
being received for the premium dollars
spent. Business insurance is not a commodity product where the lowest price always
wins. Fortunately, many business owners
recognize that their insurance is more than
a commodity: It is a relationship with trusted experts in the areas of financial protection, risk management, and ensuring safe
working environments and procedures.
How can a premium value statement help
you analyze the bottom-line impact of your
insurance premiums?
The purpose of the premium value statement is to foster discussion of what has
been provided and, even more importantly,
what is needed going forward. Once that
discussion is held, then a needs analysis
can occur. The premium value statement is
the gateway to the discussion concerning
proper allocation of the business owner’s
resources. Insurance carriers want to help
business owners allocate resources effectively because they don’t want them to pay
for what they don’t need — only for what
they do.
STEVE FISHER CPCU, is a senior executive with Westfield
Insurance. Reach him at (800) 732-0050 ext. 2402 or
[email protected].