Commercial Insurance Renewals – Hope for the Best, Prepare for the Worst

24 Jun 2021

Waste and recycle companies could be in for sticker shock when it comes to their commercial insurance renewal this year and next.  3 Top Insurance Companies for our industry Liberty Mutual, EMC and Allianz are preparing to non-renew their waste haulers and recyclers.  If you are with one of these insurance companies and you are getting non-renewed, be advised. 

Why is this happening?

Tough underwriting guidelines, inflated pricing, and difficult terms are not unique to our industry, but several negative factors converged simultaneously in 2020 that are going to make the next 12-24 months especially challenging for our industry and the entire insurance marketplace. These factors include:

  1. Political uncertainty
  2. Social upheaval – Riots and significant property damage
  3. Catastrophic weather and fire losses
  4. Nuclear Claims – (High award amounts)
  5. Covid Related lawsuits
  6. Cyber Terrorism  
  7. Economic uncertainty

What can you do?

This is what we are consulting with and telling our clients to do in advance of their upcoming renewal.

  1. Start your insurance renewal process early.  Understandably so, people tend to push off starting to meet and gather information until they must.  It is important to allow your broker and underwriters as much time as possible to be thorough and review all available options.  This could literally be the difference of thousands of dollars to your bottom line.
  2. Make sure you are marketing your business as well as possible to underwriters.  Underwriters must be able to document and explain aggressive pricing.  Help them by providing the reasons why your company deserves better than average premiums.  If there are areas that can be improved, start now, and share your plan for execution.  Recognizing shortcomings in risk management and putting together an action plan is better than pretending it does not exist.
  3. Review claims to:
    1. Close unnecessarily open claims.
    2. Reduce open claim reserves, if possible.
    3. Confirm closed claims are accurate.
  4. Evaluate coverage limits, deductibles, and options.  Maybe you are in the financial position to take on higher deductibles, captive insurance programs, or self-insure.  Knowing risk tolerance and pricing options will greatly assist in making educated decisions with regards to your insurance program.
  5. Prepare for a rate increase.  There is usually an exception to the rule, and hopefully your company’s renewal costs will remain flat or even decrease.  However, for the waste and recycle industry as a whole, this will almost certainly not be the case.  I believe most companies in the industry are going to see dramatic increases. It is better to be cautious and plan for it ahead of time, than have it catch you off guard. 

Regardless of your specific renewal situation, I believe these five action items will assist in assuring the best possible outcome.  If you have questions on how to best market your business to underwriters or improve your risk profile, please don’t hesitate to reach out directly to me or one of our team members for questions or comments. 

Cole Voors, Director
AOR Member, RiskPoint Insurance Advisors