When it’s time for your annual insurance review with your agent, remember: the more prepared you are, the more likely you are to obtain the pricing and coverage to meet your needs.The marketplace for lumber manufacturers, wood products and building material dealers continues to undergo a lot of change. Double-digit insurance rate increases, higher deductibles and restrictive coverage terms, conditions and endorsements are becoming more common at each renewal.
Here’s what to plan for:
Smoking policy: Be able to explain the company's smoking policy. Smoking remains among the top three causes of insurance loss. Having a smoking policy reduces risk, is part of a good workplace safety program, and may qualify your business for safety discounts.
Scheduled maintenance: What are the company's preventative maintenance programs and what do they consist of? Specifically, is the insulation and wiring in good condition? Are the fittings tight? Are all junction box covers in place? Are inside panels clean and free of dust? Are all areas around the panel boxes free from storage of materials? Has an infra-red scan of all electrical been conducted? Conducting a regularly scheduled self-inspection of the property, operation areas and activities helps minimize loss risk, both property and personnel.
Hazardous chemical containment: Are all flammable liquids properly stored, bonded and grounded? Static electricity is a safety issue when it comes to flammable liquids storage and mixing and dispensing activities. Proper bounding and grounding equipment reduces fire risk. Fire hazard management: Are work procedures in place for all spark/flame-generating activities, such as cutting, welding, grinding, soldering and pipe sweating? Document them.
Products and completed operations: Your products and completed operations will always need to be explained. This is the opportunity to show how well you know your operations. Most industry underwriters will want to know if an installation of product exposure exists.
Window and door manufacturing operations: Window and door manufacturing operations can also present a higher risk of claims, particularly in certain parts of the country where construction defect claims can cause your account's loss ratio and premiums to skyrocket. In most cases they will want this to be incidental to the operation. This means 10%- 20% of the total sales.
Additional insured status: You should evaluate the need for your business to provide "Additional Insured Status" to vendors, contractors or others with whom you do business. Make sure you share a current list with your agent in order to determine the necessary endorsements.
Long-haul documents: Long-haul exposures present problems for underwriters, not only from a loss/claims standpoint, but also providing filings/documents required for inter-state trucking.
Maintenance records: Provide details on your fleet, safety and preventative maintenance programs, including the company’s material loading/unloading practices. This shows underwriters you value employees, the public and your valuable equipment.
Vehicle list: Provide a complete list of all vehicles and trailers. Make sure you include the make, model, vin serial number, cost new and the garage location.
Angelo Ganguzza is Lumber Product / Brokerage Manager for AmTrust North America, a multi-national property and casualty insurer specializing in coverage for small businesses. Please visit our website for more information on our small business insurance coverage.
By Angelo Ganguzza