Insurance Assurance Newsletter
Issue #118 - June 2010
The Simmonds Business Insurance Index™ For June, 2010
Here's my read of the current marketplace for business insurance renewals:
Renewal Premiums: -10%
Renewal Coverages: Liberal Terms
Buyer's Outlook: Long-Term: Prices Flat
I don't see any signs that prices are going to go up. Run a solid business. Build a relationship with your insurer. Negotiate your renewal hard.
Employee Theft - Lost Prevention
Here's a tactic some are using to steal from their employer and how you can prevent it.
The scheme involves the paying of a common business expense, a credit card bill, for example. The bookkeeper prepares a check made payable to the credit card company for an amount above the amount due. When the check is sent to the credit card company, the employee includes his own bill, with instructions to pay the company bill and apply the overpayment to the 2nd statement in the envelope.
The dishonest employee gets his own credit card bill paid by the employer
Prevention is easy. Make the payable line of the check "ABC Credit Card - Account #12345678." Having your company's account number on the payable line of the check puts the onus on the credit card company to apply that payment only to that account.
Property Insurance Trouble
I have written about this before. However, it keeps coming up in my review of insurance programs.
Coinsurance is a penalty in your property insurance. It comes up when the insurance company thinks you didn't buy enough insurance. It bites you after you have had a loss. It only hurts you, never helps.
If your insurance agent is taking care of you, you will not have coinsurance in your property insurance policies.
The agreed amount endorsement removes the penalty. It is a good thing for insurance buyers. I am amazed at how many agents deliver proposals with a coinsurance penalty.
There are maybe 1 in 1,000 insurance policies that should not have agreed amount - from the insured's perspective.
Call your agent. Ask if your property insurance has a coinsurance penalty. If the answer is yes, ask why. This single mistake is so basic as to be almost a litmus test to determine if an agent is looking out for his client.
Property Insurance Deductibles - Mostly Too Low
Look at your property insurance deductible. I think $5,000 is a minimum, even for small insurance buyers. Why would you turn in such small property claims to your insurance company? That's dollar swapping, and it will just result in higher premiums down the road.
Recent Projects I've Been Working On
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Coverage reviews for several community banks.
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Nonprofit is having directors' and officers' concerns.
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Renewal assistance for a long term care facility.
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Renewals for several medium sized banks.
I fix broken insurance. Uncertain coverage and painful premiums. Consulting on, but never selling, insurance.
How can I help you?
Your comments and suggestions are always welcome.
Scott Simmonds, CPCU, ARM, CMC
Consulting On, But Never Selling, Insurance
Scott@ScottSimmonds.com
207-284-0085
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