As we start a new year, there is no time like the present to evaluate your company's insurance and risk management program and plan for the year. Here is a brief checklist of steps to take and things to consider as you move into 2016.
1. Take inventory of all of your coverages
- Do you have all the coverage you
need?
- General liability insurance
- Errors & Omissions liability insurance
- Directors' & Officers' liability insurance
- Employment Practices liability insurance
- Employee Benefits liability insurance
- Fiduciary liability insurance
- Cyberliability and Data Privacy insurance
- Property and Business Interruption insurance
- Fidelity & Crime insurance
- Terrorism insurance
- Are your coverage limits adequate to protect the business?
- Are you comfortable with your deductibles or self-insured retentions?
- Are all of your affiliates insured?
- Are your officers, directors and employees adequately insured?
- Do you anticipate any upcoming purchases, sales, and/or mergers or acquisitions?
- Do emerging risks such as global climate change, terrorism, and data and systems security need to be addressed in your planning?
2. Plan for your policy renewals
- When do each of your policies expire?
- Plan ahead for renewals—don't wait for the last minute
- What are you trying to accomplish
with your renewals?
- Increase coverage limits
- Broaden coverage
- Obtain better pricing
- Change insurance carriers
- Review policies that afford the right to provide a notice of circumstances that may lead to a claim to assess pros/cons of providing such notice in the current policy period
3. Analyze the substantive terms of your policies
- Do they really cover what you think
they cover?
- Carefully review coverage provisions, endorsements and exclusions
- Has your coverage grown with your
business?
- Don't rely on just carrying over your coverage from one year to the next
- When your business changes and expands, your coverage must change and expand with it
4. Put systems in place for administering your policies
- Know what the notice requirements are in each of your policies and have systems in place for providing notice
- Know what constitutes a claim that must be reported under the terms of your policies
- Know what your policies require regarding submitting proofs of loss and the timing of such submissions
- Know what your policies require regarding cooperation and insurance company consent before incurring expenses and settling claims
- Do you have systems in place so that those responsible for providing notice to insurers are aware of claims or potential claims that must be reported?
5. Review your broker agreements
- Are they one-sided boilerplate agreements provided by the broker?
- Do they clearly spell out each side's respective responsibilities?
- Do they clearly spell out the
compensation to be paid to the broker and for what services?
- Do they permit the broker to obtain contingent compensation from insurance companies?
- Are the termination provisions clear and sufficient?
- What will you owe the broker if the agreement is terminated?
- Do they contain provisions regarding data protection, data breaches, and protection of private information and trade secrets?
- Are there provisions limiting the broker's liability and addressing how disputes are to be resolved?
6. Review your vendor agreements
- Do they contain sufficient indemnification provisions?
- Do they contain adequate insurance
requirements?
- Are vendor policies primary and non-contributory with respect to your own insurance policies?
- Do you have systems in place to ensure compliance with insurance requirements?
- Do they contain provisions regarding data protection, data breaches, and protection of private information and trade secrets?
- How are disputes to be resolved?
This article is presented for informational purposes only and is not intended to constitute legal advice.