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The BFD – Big Freaking Deal
“If these Mount Everests of the financial world are going to labor and bring forth still more pictures with people being blown to bits with bazookas and automatic assault rifles with no gory detail left unexploited, if they are going to encourage anxious, ambitious actors, directors, writers and producers to continue their assault on the English language by reducing the vocabularies of their characters to half a dozen words, with one colorful but overused Anglo-Saxon verb and one unbeautiful Anglo-Saxon noun covering just about every situation, then I would like to suggest that they stop and think about this: making millions is not the whole ball game, fellows. Pride of workmanship is worth more. Artistry is worth more.”
― Gregory Peck
Pride of workmanship, is it a lost art? I just completed an audit of a distributor of film supplies risk management program and am sorry to report in this case, there is a lack of any pride of workmanship. As insurance professionals, we strive to review current risk management programs and point out to our prospects, other’s clients, and gaps in coverage that exist. We comb through every policy, form, and declarations page to determine is this good program. Sometimes, we find excellent work with very few errors, today is a different story.
In reviewing a risk management program we usually start with the insurance policies and them move on to internal policies and procedures. In this specific case, we found four major limitations or errors that could put this company out of business.
What were these egregious felonies of risk management protocol? Well first, the policy was rewritten last year from Carrier A to Carrier B. The reason for the rewrite was that one of the owners had a major issue with how Carrier A handled a claim for his wife and in his words “was not going to give the bastards any more money”. When the coverage was rewritten, the agency moved the loss of income form from Actual Loss Sustained to a limited form only providing a limited amount of income coverage for this client. During our next review, I’ll ask the assumptive question, “When you made the decision to limit your loss of income protection, talk about how that decision was made.”
Next up the current provider failed to move the retro date on both the employee benefit coverage and the employment practices coverage. Had this client had a claim with these two coverage lines that occurred before the effective date of this policy, there would have been NO coverage? There was no tail coverage sold or offered and thus, this client has been naked on all “before effective date” benefit claims.
Finally, our prospect travels the world. They have two main sales people that regularly travel over the pond to conduct business in France, the UK, and other foreign countries. At no time has the current provider ever discussed foreign exposures or repatriation. Repatriation is a key component of any foreign travel. According to Wikipedia, the simple definition of repatriation is Repatriation (from Late Latin repatriare) is the process of returning a person back to one’s place of origin or citizenship. How important is this coverage when 35% of all travel is outside the United States?
Having an audit of your companies risk management program by a Commercial Risk Manger can save your company from uncovered claims. Some firms charge for this service while we build it in to our sales process. We do charge for this service in some instances, but we are confident that the ROI is priceless.
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