Leveraged best practices and good loss experience to return $80,000 year after year

A best-in-class processing equipment manufacturer had been seeing an improvement in their loss experience, yet they were not seeing a decrease in how much they were paying for insurance.

They were curious to learn if there was a way to incentivize their increased focus on safety and best practices. Their current program was "off the shelf" and was not designed to meet their specific needs.

After engaging with Cottingham & Butler's Risk Management Assessment (RMA), they quickly learned that there was not only a better way to buy insurance, but that there were significant coverage deficiencies in their program. The company recognized the value of a customized loss-sensitive program, as well as having a broker partner who would advocate on their behalf for claims.

Program Design

• Delivered a loss-sensitive program option, Horizon, that would allow the company to receive up to 50% of their premium back for good loss years.

• Identified 3 carriers that had never seen the account before, and had an interest in the business.

Coverage

• Identified 20 coverage deficiencies in their existing program.

• Significant deficiencies include:

  • Multiple sub-limits were inadequate compared to their operations.

  • The policy was designed for Architect and Engineering Professionals, NOT for Manufacturers. Multiple exclusions related to the core business operations of the company were present.

  • No flood/earthquake coverage in a high-risk area.

Contractual Risk Transfer

• Highlighted areas of concern and how their current risk transfer methods were inadequate for their industry and line of work. Cottingham & Butler put together recommendations and corrected critical mistakes in policy language

Stability

• After joining Horizon, the company experienced a large loss in its first year of implementation. At their first renewal, their pay-in premium did not increase significantly. Had they stayed in the ‘standard’ guaranteed cost marketplace, they would have experienced a significant premium increase.

• Since then, the company has received a return of premium of over $80,000 each year for their good loss experience.  Under a guaranteed cost insurance program, they would have received NO returns.

Claims Advocacy

• While the company had great loss experience, they had not previously received any claims reviews or advocacy services. After being made aware of the impacts of delayed reporting, their claims reporting processes were improved and consistent claim reviews were scheduled with the team.