The Expert Podcast

So, what is going on with commercial insurance and business insurance? If you're a business owner, you probably have different types of insurance: liability insurance, premises liability, maybe EPLI, and different coverages for your business. And you might think that everything's fine; everything's going to be the same; you just do your renewals. However, there's some change that has happened with commercial insurance in the last 18 to 24 months that is very beneficial to policyholders. In most cases, when business insurance changes, it's not good, right? It makes it harder to get or more expensive. In this case, many of the changes that have happened with commercial insurance policies are good changes. You have to make sure, though, that your carrier has these.

It all started with cyber insurance. Cyber insurance was an add-on rider to many commercial policies—you know, $50,000 in coverage—but there are also standalone cyber policies. And what these companies did, in addition to just selling you insurance, was include active monitoring as part of the insurance policy. So they would put little tools or a little monitoring on your systems, your servers, and your websites, so if there was an attack, if there was some type of hacking attempt, they would catch it and they would let you know, sometimes before you would ever know, even before your IT people would know. And that's a good thing. Now what we're seeing is some of this active monitoring moving over to some of the other coverages: directors and officers, EPLI, other liability coverages, and the reason why, even risk, work comp insurance, is because these insurance companies are using technology to monitor for events that could create risk for your company.

And not every company does it. A lot of the legacy older companies aren't up to speed on this yet, and some of the newer InsurTech-type firms are including this. How does this help you? Well, first of all, it prevents a claim. Now, remember, you have an insurance company. Look at it as a partner, a business partner. They're trying to keep claims down because if they have a claim, they pay more than you do, right? You have your deductible; they pay the whole amount. So, anything they can do to reduce the number of claims is good. It also helps you because you don't have to pay your deductible or your retention. You also don't have to put that loss on your next application for insurance. Even if you do an application for a different company, they're going to ask you for loss runs, what your previous losses were, and your previous claims. So, if you don't have a claim, you don't have to put it on your loss run. That'll help you rate. Also, morale. Any type of major insurance event is going to bog you down for a few days or a few weeks, with you having to deal with it, employees, vendors, and clients. So, any prevention of the claim can help.

More importantly, here's the kicker: business is different now than it was in 2019. We went through COVID; there's work from home, there's different technology, and there's different working relationships. Even people who work in the office now look at the workplace in a different way. Customers look at companies in a different way. You have a lot of online resources, like Glassdoor for employees and Yelp for customers, to provide feedback that can affect claims and liability. Having somebody monitor those things and your business acquisitions, mergers, name changes, and trademarks can help prevent claims from happening for things that you didn't even know could happen.

Even though the business model of your company from the outside looks exactly the same as it did in 2018, the buildings are the same, the signs are the same—it all looks the same. The way that businesses are run now is much different in 2023 or 24 than it was in 2018 or 19. So, the risk profile, your risk liability, and your risk exposure are much different than what they were. Traditional, older legacy insurance policies may not cover all the risks. More importantly, even if they do, the active monitoring options that you have from different insurance carriers can help prevent those kinds of claims to begin with.

Even if it doesn't rise to the level of a claim, there might be things that help your employee morale—things that have to do with workplace best practices. If you put them in place, it'll keep you from having an EPLI claim, it'll keep you from having lawsuits, but it'll also keep your employees more productive, happy, and retained in their jobs. So, look at the way that the insurance industry has evolved because of the way the workplace has evolved as an opportunity for you to look at different types of coverage. Some of the older legacy policies are like horse and buggy, right? They're not up to the modern workplace or even consumer environments. See what's out there, see what options you have, and see how it can help not only save you some money but also prevent claims or risks from happening and even increase the productive performance of your enterprise.