Maintaining an Effective Working Relationship With Your Insurer

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As a small business owner, you should strive to maintain a good working relationship with your insurance company. This is true whether you interact with your insurer directly or through an agent or broker. Insurance is a people business and relationships matter. Good communication is essential. Here are ten steps you can take to establish and maintain effective interactions with your insurer.

1. Assign a Point Person

Streamline interactions with your insurer, agent or broker by assigning a trusted employee to handle all insurance-related communication.

This person could be a bookkeeper, controller, treasurer, or anyone else who is familiar with insurance matters. Inform your employees that only the assigned point person will communicate with your insurer, agent, or broker. This will help ensure that important information isn't lost and that critical tasks are completed in a timely manner.

2. Request a Point Person

If you communicate with your insurer through an intermediary, ask your agent or broker to designate one person to manage all of your policies. The assigned person should handle all interactions with your insurer that are conducted on your behalf. When a single individual is responsible for overseeing all of your affairs, important details are less likely to be overlooked.  

3. Communicate in Writing

It's best to communicate with your agent, broker, or insurer in writing. You can communicate electronically or via hard copy documents.

If you have an urgent matter that requires immediate attention, call your agent or broker on the telephone. Just be sure to make a written record of what was said. Summarize the conversation in a letter or email and send a copy to the agent or broker. Written communication is especially important when dealing with coverage requests or claim issues.

A verbal request may get "lost in the shuffle" at an insurance company or agency.

4. Know Your Business

As a small business owner, you should know more about your company than anyone else. Your insurer will rely on you to provide specific information about your business. For instance, a commercial property insurer will likely ask for the square footage of your building or rented space and the value of insured property. A general liability insurer may ask you to project your annual sales. A workers compensation insurer will request payroll information. The information you provide must be accurate as it will be used to calculate your premiums.

5. Cite the Claim  or Policy Numer

When communicating with your insurance company or agent regarding a claim, be sure to site the claim number. Insurers' claim records are organized based on claim numbers, not policyholders' names. If you are calling or writing about a coverage issue, give your agent or insurer your policy number. Like claims, policies are assigned numbers that insurers use for documentation and tracking purposes.

6. Submit Complete Information

Insurance companies are in the business of collecting premiums and paying claims. Of course, insurers don't pay every claim.

If they did, they wouldn't survive. They scrutinize claims before they make payments to policyholders. You can speed up the review process by filing your claim properly. Include complete information. Let your adjuster know that you are a knowledgeable policyholder. Make your claim stand out.

7. Don't Procrastinate!

Insurance-related matters must be handled in a timely manner. Contact your insurer, agent or broker promptly if your company acquires new property, buys another business, moves to another location, or makes any other change that may affect your insurance coverage. Don't wait until a loss takes place to notify your insurer of changes you have made to your business.

Timely notice is especially important after an accident or loss has occurred. Most insurance policies require you to notify your insurer promptly or "as soon as practicable" of an accident or loss.

If you wait weeks or months to tell your insurer about a loss, your claim payment may be delayed or even denied.

8. Don't Make Empty Threats

If your insurer is dragging its feet on your claim settlement will the threat of a lawsuit speed up the process? The answer is no. Once you mention legal action, the adjuster will send your file to the insurer's legal department or outside counsel. You will then be dealing with lawyers, not claims personnel. Don't threaten to file a lawsuit, move your business elsewhere, or take other action unless you intend to follow through. Claims personnel are motivated to settle your claim quickly and amicably. Attorneys are not. They make more money if your claim drags on and on.

9. Establish Long-Term Relationships

Like most businesses, insurers appreciate loyal customers. Try to develop a long-term relationship with one insurer. This relationship can pay off in the event of a large or complicated claim, or a hard insurance market. Don't flit from one insurer to another in order to save a few dollars.

10. Retain Competent Counsel

If you retain an attorney to represent your company in an insurance matter, choose a firm that has experience dealing with insurance companies. Your attorney should understand insurance law and be prepared to take your case to trial, if necessary.

Article edited by Marianne Bonner