The COVID-19 pandemic has left many small and mid-sized businesses in the lurch with no help from their insurance carriers.
So says Andrea Luoni, CEO and Founder of RateCraft, a company that has saved companies over $20 million in premium costs across more than 1,200 optimized projects.
And brace yourself: You’re about to pay even more for that coverage that likely isn’t keeping you covered in the first place!
Luoni recently suggested to Resourceful Finance Pro three areas all organizations should look at on the insurance front for the current crisis and beyond.
Check your existing insurance coverage
Odds are, your company doesn’t have any coverage for financial losses from COVID-19 in your main plan.
No coverage exists under most insurance policies. The reason: Since there’s no physical damage, there’s no trigger, asserts Luoni.
Though that doesn’t mean your peers aren’t trying to fight it. There are many lawsuits in the works against insurance carriers right now. But so far no one is having much success.
Fortunately, that might not be your only option. Luoni points out that coverage may exist on other policies such as workers compensation, employment practices and/or liability – depending on the claims and state.
Your insurance agency may have some COVID-specific info on its websites, so it’s worth checking there.
There are also other things your company can do to bring costs down, according to Luoni, whether it’s deferring payments or reclassifying workers compensation class codes for those employees not performing their normal jobs currently.
Watch for new coverage restrictions
The only thing worse than a gray area on whether or not you’re covered? A concrete answer that you are not.
That’s happening more and more often post-pandemic, warns Luoni. She’s finding that policies have started to include new language specific to exclude a virus, bacteria or pandemic.
That’s something you want to look for at renewal time, or if you’re shopping a new carrier.
Of course any time your company changes terms, it must notify you. But Luoni reminds it’s easy to miss it in the crush of paperwork they send.
Beat back premium hikes
But you can’t afford to wait for renewal time when it comes to premium increases.
Luoni is seeing premium jumps – even for companies without a spike in losses – between 10% and 30%. But she’s also seen hikes as high as 100%.
And they’re being sprung on companies with only a week before renewal, giving them little time to do anything but accept it.
You don’t have to end up in that same boat. Luoni encourages organizations to remember the 80/20 rule: Only 20% of insurance agents are really great
at their jobs, and most make a higher commission the higher your premiums go. So they’re not necessarily looking out for your company’s best interests when it comes to your insurance coverage.
Do your homework here – you want to market your company’s account. But before you put it out for competitive bids it’s best to know what your insurance should cost based on the best carriers.