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Although the tradition is mostly associated with individuals and their personal goals, businesses and their leaders can also make resolutions to work on company goals. Use these five risk resolutions to take control of your total cost of risk.

1. Reassess Your Limits

If you haven’t increased your insurance limits for a while, you may want to consider doing so. Over time, the amount of insurance a business needs is likely to increase. There are several reasons for this:

• Inflation makes property values and claims more expensive. The recent spike in inflation had a major impact on insurance coverage. Construction and repair costs surged as building materials, labor, and various goods became more costly. As a result, you may need higher limits to cover your risks.

• Social inflation is increasing liability costs. Litigation and claims costs increasing faster than regular inflation is called social inflation. According to the Insurance Research Council, social inflation has had a significant impact on commercial auto, medical malpractice, product liability, and other liability lines. To keep up with social inflation, businesses may want to increase their liability limits and consider purchasing excess liability insurance coverage, if they don’t already have it.

• Generally, your business exposures tend to grow with your business. For example, since you may have more inventory, you need more insurance coverage. Likewise, if you have more customers or you are delivering more product, your liability exposures may have increased. Likewise, if you employ more people, you may have increased employment practices liability risks.

2. Prevent Claims

One of the best ways to control your insurance costs is to prevent claims. Loss prevention helps you in the short term by decreasing out-of-pocket costs associated with claims. It also helps in the long term by allowing you to secure better rates and coverage terms. When fine-tuning your loss prevention strategy, there are two areas to focus on:

• Past claims: Your past claims reveal your company’s weaknesses. For example, if you have experienced several claims related to commercial auto crashes over the years, you may need to shore up your risk management by better screening drivers, providing more training, or using telematics tools to monitor drivers. Analyze your claims history to identify patterns. Remember to consider near misses that did not lead to claims but could have.

• Emerging risks: You may not have experienced any claims related to emerging risks yet, but this doesn’t mean you won’t. Stay ahead of the curve by keeping an eye on new legislation and litigation trends to secure coverage before you have a claim. For example, using AI to streamline business processes creates new exposures that many industries haven’t faced in the past.

3. Fill in Your Coverage Gaps

Due to the higher intensity of wind and rainstorms currently being experienced across the nation, more losses are being incurred due to flooding, even in non-flood zones.

A recent survey from Chubb revealed that many businesses are underestimating their flood risks. In 85% of cases, business leaders incorrectly believe that their property insurance covers flooding. In fact, flooding is a standard exclusion and you need to purchase coverage separately

Accordingly, it may make sense to obtain flood coverage even if your property isn’t located in a recognized flood zone.

This is just one example of a potentially disastrous coverage gap. A thorough review of your risks and coverages will help you identify gaps to ensure you secure the coverage you need.

4. Eliminate Coverage Overlaps

Whereas coverage gaps can expose businesses to uncovered claims, coverage overlaps mean businesses face higher costs than necessary.

Coverage overlaps occur when multiple policies provide the same coverage, which may happen when businesses purchase insurance from multiple insurance companies at different times. Relying on one insurance broker to help you consolidate coverage could help you reduce overlaps and cut costs.

5. Consider Alternative Insurance Options

If you’re unable to secure the coverage terms you want at the price you want, you may need to look at alternative insurance solutions.

• Parametric insurance provides a claims payout based on a triggering event rather than on actual losses. Many businesses have been turning to parametric insurance to secure coverage for risks like natural catastrophes.

• Captive insurance refers to an arrangement in which a company establishes a subsidiary to provide its insurance coverage. Many businesses are turning to captive insurance to secure terms that traditional insurers won’t provide and to take control of losses and insurance costs.

Do you need help sticking to your insurance resolutions? Century Risk Advisors can review your coverage and help you take control of your risks.

Contact us.