Whether you are considering a new policy or simply renewing your existing one, property insurance can be a tricky subject to negotiate. But, business owners can give themselves an advantage by beginning the process early.
An early start provides the necessary time to complete the due diligence and research any potential risk factors before meeting with an underwriter.
“If you understand your risk profile and you have a keen interest in loss prevention by having a risk management program in place, it really does help when underwriters assess your total cost of risk,” says Tony Inskeep, vice president of Aon Risk Services.
Smart Business learned more from Inskeep about how to successfully negotiate the coverage you need for your property and your business.
What are the risks involved with property program negotiations?
The first is cost and coverage risk. In any negotiation, you want to make sure you get the best rate you can while ensuring that all of your risks are covered. In that negotiation process, you have to understand what the underwriter is looking for and provide him or her with the necessary information in time to make a judgment on the risk involved.
Preparation is always key to negotiations. Once you’re prepared, your broker is better able to negotiate better results on your behalf. If you don’t prepare properly, you may incur higher costs.
How should executives prepare before entering a property negotiation?
Any executive that is looking to renew or put his or her insurance program out to market has to understand his or her risk profile. That’s No. 1. Property evaluations, business interruptions, any past claims and loss history will all affect the risk profile.
Also, understanding the current market is key. The current market is soft. Property premiums are on a downward trend. Your broker should anticipate that and meet with you consistently to discuss all options available for lowering your total cost of risk.