The owner of this large wood products manufacturing operation was concerned about how much it would cost him to rebuild his facility if a catastrophic event were to occur. Our team engaged a certified insurance appraiser to evaluate the facility and determine the full replacement cost. Because of the appraisal, the underwriter included an agreed amount endorsement on the property policy and suspended the coinsurance clause.

The business later suffered a significant fire loss of about $19.5 million to its warehouse and sorting operation. Because a current insurance appraisal was on file with the underwriter and the policy contained the agreed amount endorsement, we were able to reach a favorable settlement with the insurance company and close the claim within 180 days from the date of loss.

Problems Identified and Solutions Provided:

• Property Valuation: Inspection raised questions on the full replacement cost of the manufacturing facility. Property values were amended to provide full replacement cost based on the certified insured appraisal.
• Coinsurance Clause: The client’s property policy contained a coinsurance clause that could result in a significant penalty in the event of a property claim. Due to the certified insurance appraisal, the underwriter included coverage endorsement, thereby suspending the coinsurance clause and potential penalty.
• Rolling Equipment: Many pieces of rolling equipment were not covered in the program. Our team was able to adjust coverage to include this equipment.

This food distributor and restaurant franchisor/operator reached out to our team after a new CFO was hired. The previous CFO considered insurance to be a commodity. With less than 45 days before their renewal, our team began the risk management process with exposure identification, which uncovered problem areas that needed to be addressed. We developed an action plan and strategies to handle their current risks, along with developing a plan for future success, ultimately leading to a 65 percent reduction in their insurance costs over a five-year period.

Problems Identified and Solutions Provided:

• Separate Insurance Companies for Different Lines of Coverage: The program was very fragmented with five different insurers involved, leading to inefficiencies and additional costs incurred by the client. Our team worked with a market-leading insurer to consolidate all lines of coverage, which reduced insurance program premiums and fees.
• Automobile Liability: The large fleet of distribution vehicles were not covered in the company’s existing excess/umbrella liability program. We were able to fix the excess/umbrella liability program so that coverage applied to the delivery fleet.
• Transportation/Cargo: The insured engaged in backhauling, and it was discovered that there was no coverage for owned and non-owned goods while being transported. Our team was able to add cargo coverage for owned and non-owned goods while being transported.
• Workers’ Compensation: Claim frequency and severity had increased the experience modification to 2.11. The current insurance company was not offering renewal. By implementing safety programs and claims review meetings, we assisted in decreasing the client’s experience modification from 2.11 to 0.90 over a five-year period.
• Franchised & Leased Properties: The client leases real estate to franchise partners and it was discovered that some franchise partners did not have the proper insurance coverage in place. We worked with client’s general counsel to rewrite the insurance requirements for franchise partners and developed a manuscript property form to help cover the client’s contingent liability for leased locations.

This large manufacturing operation reached out to our team after they acquired one of our long-term clients. The acquiring company had traditionally viewed insurance as a commodity.

Our team began the process with exposure identification, which uncovered both uninsured and underinsured exposures. There was concern that the cost of fixes would nullify any premium savings. Our team helped identify solutions that not only properly protected their assets but reduced their rate structure by over 50 percent.

Problems Identified and Solutions Provided:

• Property Valuation: Our loss control inspection of the property identified a significant valuation issue. We were able to help the insured increase the property valuation by 340 percent.
• Coinsurance Penalty: Due to the low valuation, the prior carrier would have charged a significant penalty in the event of a property claim. After the property valuation increase, the carrier was willing to include an agreed value endorsement.
• Equipment Insurance: Many pieces of rolling equipment and rental equipment were not covered in the program. Our team helped secure coverage for these items.
• Business Interruption Coverage: Business interruption policy limits were below benchmarked standards for the industry. Our team added an additional $1 million of protection to the policy.
• Named Insureds: Our team identified issues with the named insureds on policies. We worked with the company through surveys to identify and correct this issue.
• Cost Savings: We were able to negotiate a rate relief of over 50 percent based on benchmarked industry standards and clarified risks to underwriter.