business
Rethinking Liability Insurance Does your firm need a new approach?
I
n the marketplace for professional liability (PL) insurance, how do you determine which program is right for your team? Ever engineering firm faces this question, as they seek to bring a high level of consistency and quality to making a decision that will affect their business year after year. As the former financial controller of a building code consulting firm and having been tasked with purchasing its own PL coverage, I learned to focus on value first, followed by the insurer’s coverage options, experience, capabilities and, finally, cost. I found this approach largely insulated the firm 24
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from the uncertainty and volatility of the insurance marketplace. In talking to my colleagues, however, I realize many engineering firms find the PL market increasingly challenging to navigate. With that in mind, the following are my thoughts on this subject. Defining value Focusing on the value of PL insurance means considering the benefits your firm will derive both now and in the long run, even if you do not file a claim. For me, this involves thinking of insurance not as a business expense
like renting office space, but as an investment. Over a long period, I have learned there is a difference between the cost of insurance and the cost of risk. While you have relatively little control over the cost of insurance, you can influence your exposure to risk. So, I recommend looking for a carrier that can help you by supporting your firm’s risk management goals. I liken this decision-making model to qualifications-based selection (QBS). Just as your clients may select your firm based on your experience, skill and knowledge, so too should you
Š TimeStopper - stock.adobe.com
By Mark Urwin
March/April 2020
2020-03-09 10:01 AM
