Turbulence in the contracting business, probably at an all-time high. Businesses are shrinking or expanding constantly. As a risk manager, you must embrace reality and try to resolve the current state of affairs.
Start your renewal process today by comparing your policy estimated payrolls with the summary W-2 sheet produced by your accounting department (must be completed by February 1).
Review the 1099s and check these recipients against your files to assure certificate compliance and proper risk transfer techniques.
After reassessing your payroll exposures for the coming year, estimate your current premium. Talk to your agent about optional markets at that premium level, insurance companies have different appetites for different size risks. Find several appropriate insurers.
Many insurers now demand loss control inspections prior to commitment to offering any quote. Get your reports in order. Make sure loss control measures are in place and working. Order loss runs from your current carrier to have on hand.
Most important: leave enough lead time for the inspections to occur. At least ninety days, so new insurers can inspect your operations.
The insurance markets retool every few years and create new identities, new brands within the industry. Currently, insurance companies are deciding what size accounts they will seek, single lines like workers' compensation or general liability, or supporting lines requirements: like workers' compensation, general liability or automobile liability. Ask your agent what the current view is among their companies.
The key to having choices is starting early now. Don't leave yourself at the mercy of the renewal carrier.
While your reassessing your policies, rethink your program as well. Your program consists of the risk management decisions that have subtle but important impacts on your insurance costs. For example: what is your best expiration date? In the construction industry, January first or April first are popular choices in a well-managed risk management program.
One secret within the insurance industry: rates tend to change on calendar quarters. If rates are increasing on April first, you can always renew on March thirty-first if you have enough lead time. But you need to know in advance and have friendly underwriters, and proactive agents.
Calendar quarters allow for government filings to be used as a basis for the insurance auditors, and audits go smoother. Corporate financial years can be good, especially if they fall on calendar quarters. Decide your best expiration date (and you want all liability lines to share that date)and begin 120 days in advance gathering quote information and loss data. Shop early.