Insurance industry experts are forecasting that premiums for higher-hazardous business classes will remain steady for 2008. The roofing industry, unfortunately, falls within the higher-hazardous business group. So as you begin to prepare for your insurance renewal, it is a good time to review your insurance program and make sure your insurance agent—or "producer" as they are now commonly called—and insurer are providing your business with the coverage and services it needs.
And if you are dissatisfied with your current insurance program because of service, competitive pricing or coverage, it may be time to put your program out for bid. But be sure you use objective criteria to help select the best producer and insurer to meet your company's insurance needs.
The process
Finding a producer who meets your business needs should involve several important steps. First, try to get a referral from your accountant, your attorney, other roofing contractors and/or roofing contractor associations. There also are some professional insurance organizations available that can help you find producers.
During your search, keep in mind that having the designation of Commercial Insurance Counselor (CIC) or Chartered Property and Casualty Underwriter (CPCU) does not guarantee a producer is an expert in all insurance areas. However, it tells you a person is committed to professional development. Additionally, all states license insurance professionals and require continuing education to renew their licenses. Ask to see producers' resumes, and look for their knowledge of insurance coverage—not just sales expertise. Also, it is a good idea to check whether producers you are considering belong to any professional insurance organizations.
After reviewing your options, select a maximum of five producers and verify they are knowledgeable about construction insurance. Also, if you are looking for professional loss-control services to enhance your safety program, make sure the producers you're considering can provide your company with these services.
In addition, ask them which insurers could best meet your company's needs. If more than one producer has contracts with the same insurer, you should assign each producer to the insurer with whom the producer has the best relationship.
A.M. Best Co. Inc., a prominent rating company of insurance entities, can provide you with information about insurers' financial strength, among other information. Look for insurers that have received an A.M. Best rating of A- or higher and a financial rating class of VII or higher (XV is the highest).
Your next step should be to evaluate each proposal you receive in terms of coverage, the insurer's longevity in the roofing insurance marketplace and price. Remember—the best proposal may not be the cheapest.
A review
If you generally are satisfied with your current insurance program, it still is a good idea to review the program with your producer and insurer.
Request a detailed, written proposal that includes not just coverage but limits, payrolls, sales, rates and classifications that affect your coverage and price. Be sure the proposal is not merely a renewal of your existing coverage—your producer should provide alternatives, improvements and updates to your insurance program.
You also should review your producer's and insurer's standard operating procedures. It is important you know what to do in the event of a claim. For instance, ask whether you should call your producer or insurer first in the event of a claim; whether your producer would help you complete claim forms and begin the claim process; and whether your producer would step in on your behalf in the event of a problem with the insurer's adjuster to make sure you get a prompt, fair settlement.
The bottom line
Finding the right producer for you and a financially sound insurer will provide you with a solid insurance program and ultimately help your bottom line.
Leslie Kazmierowski, CPCU, is NRCA's insurance programs manager.
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