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Be proactive about your risk management to boost your insurance prospects

Published 02 June 2022

Many businesses face challenges in obtaining the insurance cover they need to operate: premium price hikes, limited availability and in some cases difficulty in obtaining the full scope of cover required. Being prepared to be proactive in risk management can assist in presenting your case to prospective insurers and may help make the difference between a positive outcome and being turned down.

At Gallagher we are helping business clients meet these challenges through a combined approach of market reach, relationships with insurers and strategy in presenting positive risk management. 

While we manage seeking insurance cover on your behalf from our network of market partners and handle the negotiations that can help our clients obtain cover, our business clients can themselves contribute to an effective demonstration of positive risk management. 
 

 

Planning framework for proactive business risk management

A useful place to start is with industry standards of risk management. The Australian Government has published an international standards ISO 31000 handbook that provides the foundations for designing, implementing, monitoring, reviewing and continually improving risk management throughout your business.

The framework breaks down the risks into different areas for analysis: those risks associated with your business’s high level objectives, strategies and policies are often referred to as management risks. At the implementation level risks are often referred to as operational risks (associated with people, systems and processes, including workplace health and safety). The business property itself also requires attention and management.

This framework can help you address risk management in a systematic way that covers the information that insurers and underwriters want to see in order to calculate the level of risk your business presents.
 

Defining your business insurance risks and how you’re addressing them

Businesses considering insurance cover should be prepared to provide detailed information supported by appropriate documentation. Past claims history and how issues have been addressed will also come under scrutiny.

Taking this approach might look something like this: 

  • management risks – from responding to shareholder expectations to contingency planning, documentation supporting strategic approaches to governance matters that demonstrate accountability and organisational and fiscal preparedness is key to fostering insurer confidence
  • operational risks – cyber exposures, staff conduct, regulatory compliance and workplace safety are important components of operational risk management. A formal assessment by external experts can provide valuable proof of a proactive approach and identify potential cost of losses to the business
  • property risks – especially in relation to challenging commercial property types such as locations prone to natural hazards or building composition involving combustible or toxic materials. Undertaking a risk survey, especially one conducted by a qualified third party, is recommended for any properties with complex risks. In some cases engineering reports are required by underwriters, and insurers are now insisting that risk management recommendations are actioned before providing even partial cover. 
     

The value of external input in obtaining insurance cover

Involving an insurance broker who understands your industry sector and the risks that are particular to your business can help you to proactively respond to insurer risk management concerns and also potentially provide access to more comprehensive cover on more competitive terms.

Industry research has also found that the degree of broker involvement correlates positively with client satisfaction with claims outcomes: having insurance industry guidance and input is more likely to secure cover that responds to your business’s needs. We’re here to help. Talk to one of our insurance experts. 
 

Further reading

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Gallagher provides insurance, risk management and benefits consulting services for clients in response to both known and unknown risk exposures. When providing analysis and recommendations regarding potential insurance coverage, potential claims and/or operational strategy in response to national emergencies (including health crises), we do so from an insurance and/or risk management perspective.
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