As the economy grows, your organization is likely to grow, too. And growth affects everything – including your risk. Here are nine ideas from The Miller Group about how to manage your insurance risk and the related costs, given current economic trends.
- Create the right culture and train and hire the right people. Millennials are outnumbering all other generations in the workforce. Are you adjusting your hiring and culture accordingly? Disengaged employees and high turnover both affect claims. Did you know that an estimated 30% of claims occur in the first 90 days on the job?
- Take your risk to market. If you haven’t sought competitive bids in the last two years, now is the time to do it. Many times, we find we can increase clients’ protection for the same cost.
- Demand a high level of service from your broker, third-party administrator and carrier. With low rate increases, providers can’t compete on price alone; they have to up their game. Ask for contract certainty, clarity of policy and loss prevention support. And make sure you’re getting regular reviews that include claims analysis, risk audits, building appraisals and strategy discussions.
- Report claims promptly. Pricing pressure also leads to more claims denials and higher claims costs. Make sure you have processes in place to report claims right away. You should even notify your broker when you become aware of a situation that might give rise to a claim.
- Actively manage your workers’ comp rates. Focus on minimizing your experience modification factor with clear policies and procedures, timely claims reporting and a strong return-to-work policy. Consider directing your medical providers.
- Develop safety policies and procedures. Train your staff and communicate safety incessantly. Ask your broker for help with understanding best practices in safety and loss control.
- Prepare yourself for a cyber security breach. It’s not a matter of whether you will experience the latest security threat; it’s a matter of when. While the big ones make the news, it’s the small-company breaches that have the most impact. Organizations with fewer than 250 employees account for 31% of all cyber attacks. And 60% of those organizations will shut down as a result. The average cost of a breach is $188 per record. You can protect yourself by purchasing cyber liability insurance, creating written cyber security policies and training employees on basic security measures.
- Brace yourself for #MeToo. Sexual harassment suits are on the rise. Now is the time to ensure your managers and directors are well trained on sexual harassment and you have clear policies and procedures in place. And talk with your broker to make sure your EPLI and D&O policies are current and sufficient.
- Proactively manage your automobile risk. Auto rates are continuing to rise – primarily because of distracted driving. You can manage your risk by creating a safe driving culture, including a no-phone driving policy; requiring employees and volunteers to have a minimum level of auto coverage (their policy pays first); and getting “hired and non-owned” auto liability insurance.
With luck and a little proactive planning, your organization will benefit from the broader economic growth and relatively stable commercial insurance rates. Putting some effort into adjusting your risk management practices accordingly will put you in a much stronger position to harvest the potential gains.