Paying higher and higher insurance premiums every year feels like a seemingly inevitable experience. At the very least, in exchange for those increased payments an organization and its leaders should be able to feel confident their business is adequately protected in the event of a loss.
The problem is, many insurance customers’ confidence is false. They’re not aware the insurance and risk programs set up for their business may not respond the way they intended – if at all. When a company’s business strategy and their insurance program are out of alignment, substantial (and in many cases completely unknown) exposures often arise within the organization.
There are countless examples of organizations incurring major unpaid losses due to uncovered exposures. It impacts the company’s balance sheet, executive team, and the investors who put their trust in the organization. In most cases the company only finds out its exposed after a large uncovered claim – when it is too late to do anything about it.
At the Corporate Protection Group (CPG), our mission is to help organizations and their business leaders achieve success by identifying these unknown exposures and reducing or removing them. By aligning insurance and risk management with a company’s core business strategy, our structured approach reduces losses while enabling growth and increasing profitability.
The Most Common Issues Experienced by our Customers:
Insurance not aligned with your business strategy
Most companies purchase off the shelf insurance policies with no strategy to align coverages and costs with their long-term business objectives – resulting in costly, inefficient insurance programs, which often do not provide adequate coverage for the scope of operations (both current and future).
Insufficient coverage or critical policy exclusions
Insurance policies begin with a broad statement of coverage, however include exclusions, endorsements and policy conditions that will greatly narrow coverage. It is our experience that most companies do not read or fully understand their insurance policies, which often contain critical coverage shortfalls unbeknownst to the insured.
Ineffective contractual risk transfer
Traditionally, contracts are written between two parties and often do not contemplate the insurance carrier, the one who pays the claim. Without aligning the contract language between the corporate contract and the insurance policies, both parties may unknowingly be voiding coverage or agreeing to items that are not insured or uninsurable.
Third-parties do not have the coverages you think
All contracts drafted will outline the services to be performed and then insert language such as warranty and indemnity language that is extremely broad. However, most companies do not contractual require and validate that third-parties maintain insurance to satisfy these indemnity obligations, creating significant balance sheet risk.