Business insurance is a broad category. It covers everything from property and casualty insurance to health, disability and life insurance. But, one constant remains - at some point your business will need to work with its insurer in resolving a claim, increasing coverage or adding an employee or property to a particular schedule.
Here are some pointers to help your business work with its insurers.
- Establish One Contact Person or Department: Your business should have one person or department designated as the point of contact for all insurance issues. Often this is the "personnel" or "human resources" department or the "bookkeeper" in smaller businesses. All employees and managers should be trained to turn to this one point of contact with insurance issues. This eliminates confusion, redundancy and the possibility of coverage being missed because "someone else was going to call."
- Demand One Point of Contact from your Insurance Professional: This may not be easy if your business is a smaller account. However, you want one responsible party and their staff at the insurance professional's office working on your requests for the same reasons you want one responsible party at your office.
- When Dealing Directly with an Insurer - Put Everything in Writing: If your business is in a situation where there is a dispute with your insurer or a question of coverage, it is always better to discuss everything in writing. Even if the telephone is used, follow up with a letter copied to the insurer and your agent. Insurers are large companies with a very high turnover rate and most verbal "promises" are not effective.
- Insurers Do Put Everything in Writing: If you have ever spoken over the phone with an insurer you may have heard some typing going on in the background. Most insurers require their employees to log in every call and the substance of each call. These "logs" become part of the claim file.
- Include the Claim Number in Every Call and Letter: When talking to the insurance company, your agent or writing to them, always include the claim number. Insurers live by claim numbers not names.
- Understand the Insurance Company: Insurers in most instances are not "out to get you;" however, the insurance company stays in business by doing one thing well: limiting claims. Employees get promoted by limiting claims. Stock prices go up by limiting claims. Understand this principle and use it to your advantage by asserting your claims with evidence, knowing the policy and with your insurance professional's complete support. Make your well supported claim or request stand out.
- Never Threaten Unless You Will Follow Through: The logs the insurer keeps often end when the insured threatens legal action. At that point, insurers turn over the matter to their legal department or outside counsel. You will be dealing with lawyers and not claims personnel if you threaten legal action. Never threaten pulling an account, legal action, or any other recourse unless your company will follow through. Such threats only pull the matter from the people who have a stake in resolving the issue and put it in the hands of those who earn more if the matter is not resolved!
- Establish Long-Term Relationships: Work to establish long-term, claims-free relationships with your insurers. Doing so will pay off if a big, questionable claim occurs.
- Retain Competent Business Insurance Counsel: You will want to have good, competent counsel to represent your company. In almost all states, officers of a corporation cannot represent the company but must use an attorney. Therefore, it makes sense to find one that is competent in insurance issues, can take a case to trial if necessary and knows insurance law and how to work with insurers.
Most businesses I work with have never had any problems with their insurers. The ones that have often are in the position because they have done or failed to do one of the steps listed above.