The prospect of an insurance inspection is more likely to stir up feelings of dread than eager anticipation, but actually, inspections can provide your business with plenty of great opportunities to reduce risk.
Although it may seem like an insurance inspector is trying to “catch” you at something bad, their real goal is to help identify hazards before an accident happens so you can correct them and reduce your risks. And that should be your goal too. In fact, many savvy risk managers and business owners will request an occasional inspection to pinpoint risks and ask for recommendations in correcting safety issues.
Insurance inspections can consider lots of factors – the physical building, security, equipment, processes and other factors that could contribute to increased liability risks. The next time an inspector comes to your business, consider it a learning opportunity: Walk around with them and ask them to explain their concerns and findings to you so you have a clear understanding of what you can do to reduce risks and, potentially, qualify for lower premiums or special discounts.
Ask the inspector ahead of time if he or she can set aside some time after the inspection to meet with managers and discuss the findings. Having an opportunity for face-to-face discussions is the best way to understand the inspector's recommendations and requirements, how they can be implemented and how they can benefit your company. This is also a good time to discuss any concerns you may feel are unreasonable, allowing you to present your “side” and ask for possible reconsideration.
Once you receive the final report, make sure to complete recommendations within the given time frame and request extensions only when necessary. Remember: The inspector usually has significant influence with your insurance carrier, and a cooperative attitude can help the inspector – and the insurer – see you as a better risk.
The next time your insurer announces an inspection, instead of dreading it, consider it a perk – a freebie provided courtesy of your insurance agent. Rather than look at an inspection as a chance for an insurer to raise your rates or cut your coverage, consider it a chance to proactively reduce risks and save your business money in the long run.