10 New Year’s Resolutions For The Commercial Insurance Buyer

Now is a good time to review your commercial insurance programs and risk management plans to ensure that your company is adequately covered in 2012. Here are just a few of the issues risk managers, CFOs, and business owners should be looking at in the new year:

1. Have you updated your disaster contingency plans for such events as natural disasters, as well as cyberliability and other computer-related attacks? If you do not have insurance for data breaches and privacy-related claims, now may be the time to purchase it.

2. Is your directors and officers insurance state of the art? The D&O insurance market has been soft in recent years, and if you have not changed your D&O form or shopped your D&O coverage lately you may be surprised at the expanded coverages that come with newer forms.

3. Speaking of shopping your insurance, it may be time to get competitive bids for your property and liability programs, or to bring in another broker to compete with your long-standing incumbent broker who may be getting a bit complacent.

4. If you have it, check employment practices liability insurance to make sure it is up-to-date with the current structure of your workforce. If you have done any outsourcing recently you may need independent contractor coverage.

5. Check vendor and indemnity agreements you have recently entered into with suppliers, distributors, and other business partners.  Does the insurance you have meet your insurance requirements in these agreements?

6. Similarly, make sure your business partners are buying the insurance they have promised to buy.  And this year, do not rely solely on certificates of insurance — get and review copies of policies.

7. Check to make sure any recent corporate changes, such as mergers, acquisitions, dispositions of assets, creation of new subsidiaries, etc. are properly accounted for.  Check your named insurance and additional insured endorsements to make newly-created entities are covered.

8. Check to make sure your crime and fidelity coverage limits are sufficient in the event a rogue employee embezzles from the company or causes other harm from the inside.

9. Consider alternative risk management arrangements such as self insurance, captive insurance, and other options to better manage risk and take more control of your premium dollars and self-insurance reserves.

10. Make sure management and your board of directors are aware of the daily insurance and risk management victories that help keep your company, directors, officers, and employees safe and properly covered.

For more insurance and risk management tips, as well as updates on legal developments impacting Florida insurance law from a policyholder perspective, check back for future blog entries.  You can also visit the In The News section of the Friedman P.A. website for recently authored articles by Robert Friedman in publications like the Daily Business Review and South Florida Business Journal, including his latest South Florida Business Journal article entitled, “Insurance Coverage Should Match Main Risks, Liabilities,” from November 16, 2011.