19 February 2024
by Eric Jesse
Lowenstein Sandler
To print this article, all you need is to be registered or login on Mondaq.com.
Eric Jesse of Lowenstein Sandler's Insurance Recovery Group discusses the currentstate of the property insurance market, and offers three tips onhow companies can make their commercial properties a moreattractive risk to insurers.
Speakers:
Eric Jesse, Partner,Insurance Recovery
TRANSCRIPT
Eric Jesse: Hi, I'm Eric Jesse fromLowenstein Sandler's Insurance Recovery Group. Welcome to "Inthe Know."
Today we're going to discuss the state of the propertyinsurance market and three things companies can do to makethemselves an attractive risk to insurers.
Commercial property insurance is a core coverage for businesses.It protects your business' buildings and structures from lossor damage, along with property, equipment, and other personalproperty that's inside those buildings. Property insurancetypically covers lost business income lost as a result of a coveredevent. This coverage was in the spotlight during the COVID-19pandemic when businesses were forced to shut down or operate withrestrictions.
So, what is going on in the market? Billion-dollar naturaldisasters, supply chain issues, and inflation issues are some ofthe events that are contributing to significant losses and insurerpayouts and—relevant to you—a hardening insurancemarket. This means increasing premiums, but it also means insurersare increasing deductibles, offering lower limits, addingsublimits, and including more restrictive coverage grants andbroader exclusions.
Despite that, there are a few things businesses can do tonavigate this tough market, to minimize the impact of thesewidespread events, and to ultimately be a more attractive risk.
First, work with a knowledgeable broker andcoverage counsel who will know the ins-and-outs of the market andwill advocate for you. Also, just be proactive. Don't waituntil a few weeks or a month before your policy is set to renew.The renewal process takes time, and getting a head start can giveyou a better chance at negotiating better terms.
Second, ensure your business has robust riskmanagement procedures. For example, if your business enters intosubcontracts, make sure that those subcontractors have their owninsurance and that your company is named as an additional insured.Insurers will be more comfortable insuring you if there are otherpotential sources of recovery in the event of a loss, that spreadout their risk exposure.
Third, be ready for a more intensiveunderwriting process and anticipate the questions that will comeyour way. For example, does your business have a current statementof values so that insurers can understand the magnitude of the riskthey are taking on? On the business interruption side, what doesyour supply chain look like? Do you have a list of vendors you relyon to run your business? Preparing these materials in advance willallow for a smoother underwriting process and also show prospectiveinsurers that your company has its act together.
Thank you for joining us, and we look forward to seeing you nexttime on "In the Know."
The content of this article is intended to provide a generalguide to the subject matter. Specialist advice should be soughtabout your specific circ*mstances.
POPULAR ARTICLES ON: Insurance from United States
Sometimes You Have To Sweat The Small Stuff: Technicality Renders $10M Excess Policy Valueless
Lowenstein Sandler
In the 96 years since Zeig, excess insurers have sought to erode this rule by inserting various "condition precedent" provisions into their policies.
City Of Whittier v. Everest National Insurance Company
Lewis Brisbois Bisgaard & Smith LLP
(January 2024) - In City of Whittier v. Everest National Ins. Co., 97 Cal.App.5th 895 (December 6, 2023), the California Second District Court of Appeal reversed...
Third Circuit Holds That Insured Must Satisfy All Conditions Precedent In Excess Policy To Trigger Coverage
Wiley Rein
The insured sought insurance coverage for defense costs and settlement of a putative class action under a tower of directors and officers liability insurance.
Understanding The New York State Department Of Financial Services' Proposed Guidelines On AI And ECDIS In Insurance Underwriting And Pricing
Frankfurt Kurnit Klein & Selz
On January 17, 2024, the New York Department of Financial Services published a letter containing proposed guidance regarding the use of artificial intelligence systems and external consumer data and information sources ...
Insuring Real Estate Transactions: When RWI Pays Off (Podcast)
Lowenstein Sandler
In this episode of Terra Firma: Conversations on Commercial Real Estate, hosts Stacey Tyler and Stephen Tanico of Lowenstein Sandler's Real Estate practice...
FDIC Issues Cease And Desist Letters To 5 Entities For Making False Or Misleading Representations Regarding Deposit Insurance
Greenberg Traurig, LLP
On Jan. 19, 2024, the Federal Deposit Insurance Corporation (FDIC) issued letters demanding five entities and certain associated parties cease and desist from making false and misleading statements about FDIC deposit insurance.
