On a scale of 1 to 10, how confident are you that the insurance you have in place will respond to an unexpected event? Major recent events in the insurance industry such as COVID 19, riots and storms are creating challenging economic conditions. In response, insurance companies are rapidly adjusting rates and coverages to find stable footing.
The process of securing and reviewing insurance policies and contracts too often is clumsy, rushed or altogether forgotten, so it is only natural that when juggling the responsibilities of working in a clinic this is often placed on the back burner.
As an owner, your clinic has likely seen increases in insurance premiums in a number of the high quality coverages you have invested in to protect your most significant assets: your staff, your office, your patients and you! But if you set up your coverages in the distant past and haven’t taken the time to review and update them, you may be missing out on important protection. The insurance review process shouldn’t leave you exhausted, frustrated or financially over-burdened. Further, the goal of a good insurance program isn’t the absolute prevention of claims but its ability to get you back up at running and minimize the long term effects.
With both significant earning opportunity and assets tied into your practice, take the time to review and ask questions about your coverage before the time of a claim. We have seen a positive shift in the emphasis clinic owners put on reviewing their coverages. There are a greater variety of standard and specialty coverages designed to meet the new exposures you face today. Everyone has their own risk tolerance but your insurance ‘program’, the combination of coverage options you have selected, should reflect the amount of risk you feel comfortable taking on. Your level of protection should be adequate enough to protect your current assets AND future revenue generating opportunities.
Of course, one of the objectives of selecting quality insurance is to protect your assets and not just spend them. It can be easy to focus on each invoice that is delivered but finding balance in the cost and protection of your insurance program is critically important.
Insurance premiums have been on the rise and are expected to increase again for many lines of coverage in the first half of 2021. When looking at insurance financial data; underwriting costs and expenses have been incredibly steady but the largest portion of the rise in premium is due to the rapid increase in the cost of claim settlements due to widespread property losses as well as an upturn in litigation. According to Verisk, an independent insurance information service, the average bodily injury claim in auto accidents rose by 31 percent from 2008 to 2017. That doesn’t mean that there are not still ‘good deals’ and savings to be found in your insurance program.
While it is valuable to look at the insurance market place on the whole, when an independent agent sees the market at the carrier level they see small cycles. My advice - instead of looking at dollar increases year to year, instead look at percentage increases relative to your revenue.