Certain clients become defensive when the insurance company mandates certain recommendations for loss prevention or mitigation. And sometimes it can be a daunting task for brokers trying to educate their clients about the importance of compliance. However, brokers should also be careful to analyze if carrier mandated recommendations are reasonable and if it would make sense for the client to incur additional capital expenditure. When there’s a claim, insurance carrier would respond, so it’s understandable why it would ask certain repairs to be made or conditions to be modified. They want to be certain that they have put in place certain recommendations to reduce or omit claims.
The cost to comply can be expensive and time-consuming, and if there’s a deadline, it’s important to move forward as quickly as possible. However, certain things are out of your control, such as the weather or supply insufficiency. Therefore, in the interim, it’s important to identify an alternative strategy with your broker and carrier. Carrier may be able to extend the deadline or may approve an alternative solution. For instance, if the insured cannot install railing on the loading dock on time because it would take months for municipality to approve, perhaps a temporary solution would be to paint the edge of the loading dock with bright colors to increase awareness to prevent slip and fall claims. Temporary solutions may not replicate railing installation, but it would give the carrier confidence that you are doing your due diligence to get the job done.
Recommendations are there for a reason, and it is a value-added service by the insurance carrier to help the client reduce their long-term cost of risk. Insurance premium is driven by claims history, and although recommendations may not provide a claims-free solution, it is a valuable resource that can be extremely useful to reduce claims. We all love quality business, and insurance companies certainly favor businesses that are willing to put in the effort to achieve a mutually beneficial objective.