Not every manufacturing businesses has state-of-the-art facilities and equipment. Sometimes this causes the insurance company, through the risk-control process, to penalize your rate, weaken coverage, or force you to spend money on facility improvements. So let me explain a few things about the risk control process, and then I’ll offer a key solution.
When you begin the policy period, someone from the insurance company, from the risk control department, comes out and does an inspection of your property.
They’re looking for anything in your property that could increase the chance for a claim. Maybe your fire extinguishers haven’t be tested in a few years, or the fire sprinkler system is older and increases the risk for a leak and subsequent water damage, or maybe your inventory is arranged in a way that increases the chance for fire to spread.
Insurance companies can be very punitive in response to a poor risk-control visit…penalizing your rate, weakening coverage, or forcing you to spend money to make improvements.
So how do you deal with this situation? The best way to handle this problem is to never have a problem. And by that, I mean – Be strategic in choosing your insurer, and opt for one that is more relaxed on risk-control standards.
Someone in your office may have some expertise in this area. If not, I’m a free resource. My agency niches in insurance for manufacturers and we’ve developed a keen sense for which insurers are more or less intense than others.