 Risk Rehabilitation...Part II By Robert Wasserman, CPCU |
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Yes, I know I was supposed to update you during April...but things haven't happened precisely the way I prognosticated! Actually, the account renewed with the incumbent insurer and broker subject to a number of risk reduction and avoidance measures coupled with a higher deductible. I feel that everyone is being well served by this outcome. Here's what happened.
First, we (the broker, the insured and I) sat down to discuss the situation and evaluate any options that might make the crime risk more acceptable to the insurer. This involved three areas:
1. Reducing the theft exposure by limiting the amount of valuable property kept in vulnerable glass display cabinets.
2. Avoiding the possibility of theft from exposed shelving within the store by not placing any frames there.
3. Assumption of more of the risk by the insured via a higher theft deductible.
4. Improving the insured's security oversight.
Let's take a brief look at each measure:
We determined that past claims involved several smash-and-grab losses from the glass display cabinets. While the insured must be able to show its wares to the public, it became a question of being more selective so that a good sampling could be displayed but, simply, less of it.
Two claims resulted from expensive frames being stolen from open shelves throughout the store. We suggested that items be placed only in locked glass cabinets. This would also free up those areas for advertising displays that the insured said were needed.
We emphasized to the insured that a higher deductible would go a long way toward easing the insurer's anxiety about the crime exposure and suggested a $1,000 per claim deductible subject to an annual aggregate of $5,000, thus limiting the insured's total annual outlay.
Finally, along with the higher deductible, we felt the insured would be amenable to instituting a program of greater vigilance. This could be accomplished in several ways:
1. Situate store displays so that they're always within view of staff.
2. Always keep display cabinets housing valuable articles locked and, if possible, behind service counters so that access to them by the public becomes more difficult.
3. Install "panic buzzers" in strategic locations so that police can be notified immediately in case of a robbery.
4. Finally, educate staff as to the importance of not resisting apparently desperate and dangerous persons. Giving up property is far better than risking injury or forfeiting one's life!
The insured agreed to these measures and we presented them to the insurer. After satisfying itself that they could have a salutary effect on the potential for crime losses and being assured that the insured would cooperate with a monitoring schedule by loss control representatives, the company issued the renewal policies at a fair price.
All parties seem to have benefitted from some basic risk rehabilitation through loss control. Insureds, brokers and underwriters should remember that many risks can be changed for the better with a little time and effort spent in analyzing just where the problems lie and addressing them in a sensible way. | |||
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Visit us next time for another article related to loss control and prevention.
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