by Joan Michelson
May 12, 2020
by Joan Michelson
May 12, 2020
Since insurance is supposed to be a backup plan, and we sure need one today with this pandemic-caused economic shutdown rippling through each of our lives, I spoke with Tina Kirby of Insurance Innovators for tips on what we can do to make our insurance policies actually serve our lives. She has been in the industry for about 25 years, working on all sides of it.
Remember that your policies renew every year, so you can make changes at that time. We talked about climate change, as well as the current economic crisis.
Here are 10 tips from Kirby for getting insurance that works for the way you work and live:
Instead of deferring to the options your broker gives you, tell them price is not your primary focus and that you want to know what you need for the potential crises you might actually face. “If your broker says there’s only one option, choose a different broker,” Kirby recommended, because “not all the brokers have the time, energy or the knowledge” to look harder and scan various insurers to meet your needs.
Insurance policies are written in such convoluted language it’s no wonder most of us have no idea what we are really covered for or what our benefits would be in a disaster. Fortunately, a movement was started that’s actually called “Plain English,” Kirby said, so push for your version.
Buy a policy that addresses anything that you can imagine happening, and this pandemic certainly throws new elements into the mix.
Business interruption, for example, could include, “your lack of sales, your lack of being able to produce things, your lack of being able to distribute things,” Kirby emphasized, or your lack of employees or customers or roads and bridges, all the things that enable you to have an operational business.
To do so, Kirby wrote me that: “Some property policies have non-damage extensions…A policy holder should check here to see what non-damage causes of business interruption are listed. You might see Government Edict or Mandatory Order or something similar – if your area Is in lockdown this should trigger your policy and pay some income loss.”
“Denial of Access is another – if you can’t get to your place of business this could help - but check the words as this might require there to be a physical damage somewhere else. Similarly look for Customers and Suppliers extension – this may help if the business loss is because of your supply chain – again check that it doesn’t need a physical damage somewhere. If you are lucky there may be a disease extension, then you have cover – check the limitations.”
When reviewing your current one, choosing a policy, or even after a disaster, “the first thing to do is to understand.” What does your policy’s wording actually mean when it comes to business interruption insurance or property damage? Ask your broker to literally show you the words in the policy in question.
Keep asking for more information and for their assumptions, because those are what they are basing their decisions on and may well be incorrect. This is particularly true if you are being told you are not covered for a disaster or other business interruption.
You’re much more powerful if you come together to seek insurance changes and exceptions from your insurance companies. Create a movement within your community.
Quantify it and if it’s “an existential bankruptcy-type problem, or is it an annoying time-consuming but not hugely valuable problem,” according to Kirby.
Do your research, Don’t depend on insurance to protect you from your risk and in fact, Kirby said that actions you take to mitigate your own risk could help reduce your insurance costs as well.
Find out from your city what the potential impact could be on your area of a category 5 hurricane, for example, and what it could mean for your business or home. Then take actions you can take to shore up your property and tell your broker to take those actions into account. “If they give you a quick answer, make them go at it again,” Kirby insisted, because you are paying them through the commission they will make on your policy.
Kirby wrote me that we need to, “Think intellectual property disputes, reputational harm, boycotting, internet failure, border closure, labor embargo, localized and global disease outbreaks all of these don’t have a physical trigger point but do have significant business impact.”
In short? You may be more in control and able to get more from your insurance policies than you think; at least the next ones, if not the ones you have now.