The TCIA Winter Management Conference is wrapping up as I write this in early February, and I am reflecting on the stories I’m hearing about the positive impact the Arborist Safety Training Institute (ASTI) is having on companies. I’m hearing that ASTI, a program of the TCIA Foundation, is helping businesses formalize job skills and safety training. And that has me thinking of the many obstacles businesses face in securing business insurance.
When it comes to renewing your property and casualty (P&C) insurance, you can count on two things: it occurs each year, and the cost seems beyond your control.
Consider the cost
The cost of your insurance should be based on several factors, including the type of coverage, your location, the value of the property being insured and your business’s past claim history. Somehow, your premiums are always impacted when your claim history is poor, but never seem to truly reflect the positive years.
The insurance market is complex and intertwined with all aspects of our economy, including the legal system and the changing environment. Many factors are beyond your control, such as catastrophic natural events, increased lawsuit awards and medical and property inflation. These factors can have an enormous impact on market pricing. Insurance companies understand these risks can fluctuate year to year, but also know that when you analyze a longer timeframe, actuarial trends in claim history do become more predictable. It is this variability between your annual pricing and the trend in your claim history where opportunity exists.
With P&C insurance being one of your largest business expenses, cost can easily become the sole motivating factor in your decision. Too much insurance will impact your bottom line, while not enough may expose the business to unmanageable risk.
Own your risk
So what can you do? Own your risk. Become accountable for a portion of your insurance cost. Doing so can have a tremendous impact on your business and company culture.
When a business retains a portion of its risk, it begins to learn the impact training has on its safety performance and culture. You are incentivized to implement strategies to minimize your losses, since you share in the cost of the risk. You learn how claims are handled by your carrier and have a say in the process. Your employees become engaged, because they are part of the solution and not the cause of the problem.
Explore higher deductible options, self-insurance groups – or captives – in workers’ compensation, inland marine, general liability or auto. Start small and focus on the risk you feel you can impact. Over time, the investments you make in your employee training will lower costs. They’ll improve the safety of your organization and enable you to grow your business.
Arthur Batson, III, is president and chief executive officer at Lucas Tree Experts – an accredited utility contractor, 43-year TCIA member company based in Portland, Maine – and is a member of the TCIA Board of Directors.