Emphasizing employee safety in the workplace not only protects employees, but also a company’s bottom line. Workers’ Compensation claims can be extremely costly and drawn out depending on the type of injuries and litigations surrounding them. Additionally, and often unnoticed, a company’s experience modification factor or “mod” can also create major cost implications.
When it comes to succession planning, most people think of protecting their legacy by arranging their personal estates ahead of time, and the same holds true for business operations. Depending on if and how continuity plans are structured, a company may become employee-owned through an ESOP (Employee Stock Ownership Program). The stability of ESOPs can strongly influence the outcome of obtaining surety bonding and are often underutilized in the construction industry. There are many factors in bond underwriting, but one of the most under-discussed is continuity planning.
As we enter into the second half of 2018, the state of the Property & Casualty (P&C) market looks strong with multiple sources of opportunity on the horizon. One thing is certain, after the catastrophic damage from 2017, underwriters are taking a more in-depth look into potential risks. Brokers with a “client-first” mentality are setting themselves apart from the competition by working intensely with their clients to put policies into place that mitigate risks and keep premiums as low as possible.
According to a recent report from the National Center for The Middle Market, 21% of Middle Market businesses have experienced a business interruption loss as the result of damage to their facilities and of this number, only 77% completely recover from this loss. Every company’s worst nightmare is a disaster striking, causing significant damage to its infrastructure and a shutdown of operations. The damage to buildings and contents are just the tips of the icebergs. The resulting loss of business income and continuing expenses that continue during the rebuilding can be far greater than the cost to repair the damage. Business Interruption insurance can be the difference between being able to focus on strategically planning the company’s next steps while rebuilding or having to permanently close the doors. With that said, simply having Business Interruption coverage may not provide the coverage you need following a loss, therefore, it is important to make sure you have the appropriate language and limits in place prior to a loss.
It’s safe to say that most companies underestimate how susceptible they are to workplace violence and an active shooter and threat scenario. While there are some industries that are more prone to incidences, workplace violence is a threat to all work environments. It is in the best interest of all business owners, board of directors, leaders and managers within each organization to assess the exposure, communicate and educate your workforce, and manage the risk to protect your assets and financial interest.
The commercial insurance industry is comprised of a complex blend of risk assessment, prevention, and circumstances that are many times left in the hands of Mother Nature. Underwriters and insureds go to great lengths to ensure that every preventive measure and precaution is taken to mitigate the risk, but all the best practices, experience and prevention could not control the detriment that Mother Nature would cause in 2017. Now, in 2018, the insurance industry is trying to pick itself up and dust off after suffering from a $23.5 billion industry loss last year after $52.9 billion of catastrophic claims were filed. 2 To say that these figures will impact 2018 would certainly be an understatement.
In the News:
Ironwood Adds Risk Management Veteran to Its Property and Casualty Team
ATLANTA, GA (March 1st, 2018) - Atlanta-based Ironwood Insurance Services announced today that Doug Susco will serve as Ironwood’s newest Client Executive/Producer. Susco brings with him almost a decade of experience working within the commercial property and casualty insurance industry on both the carrier and broker side.
Will Underwood, President of Ironwood said “We are thrilled to have such a talented individual join our team. We expect him to do great things and have a long, successful career at Ironwood.”
As 2017 winds down and 2018 is practically knocking at the door, it has been a year resulting in much economic prosperity for many, but also has presented many corporations with large windows of risk. Some of these risks are common from year to year and ebb and flow due to economic conditions. However, some risks, like cybersecurity, seem like they are nasty viruses that are constantly morphing and evolving to their environment, always staying one step ahead.
The summer of 2017 brought a plethora of catastrophic insurance events including: hurricane heavy-hitters Harvey, Ivan, and Maria, two earthquakes in Mexico and scorching wildfires in California causing over $100 billion in insured losses.1 The rising costs of property and casualty (P&C) rates are no secret and our projection is that these increases will continue through at least the first part of 2018. This along with the unique exposures faced by multi-family owners and managers poses a challenge for their insurance renewal. Despite these increasing costs, losses and the inherent risks that may come with writing coverage on Multi-Family Real Estate business, a well-informed property owner partnering with an experienced broker with industry knowledge, can work together to obtain a comprehensive program at the best possible price and coverage terms.
Traditionally, the Surety Industry has been reluctant to provide a bond line for a company whose ownership is being transferred to a Private Equity Fund. The only option for a Private Equity Sponsor during the diligence phase has been to approach the existing bond carrier with the assistance of management and the existing surety broker. Quite often the broker and surety are uncomfortable with a Private Equity transaction’s leveraged balance sheet. As a result, the existing surety requires additional security in the form of personal, outside indemnity, or a letter of credit in the amount of 50% to 100% of the outstanding bond exposure. With that said, the majority of surety underwriters will decline to participate on a post-close basis.