News

Good Management Pays Well

March 2017

What qualifies a company to be considered under good management? How does this measurement affect your policy premiums?

It is no surprise that insurance companies seek to partner with risk-avoiding management staffs as those that are committed to reducing their losses are ideal candidates for agencies and providers. To attract partnerships with companies possessing ideal ownership, insurance companies offer an enticing incentive.

A company practicing good management is evaluated on their attitude toward safety; financial stability, housekeeping and maintenance, and employee recruitment and selection processes. Well-managed, safety-conscious companies can earn schedule credits which can impact premiums up to 25%. Unfortunately, poorly managed businesses earn debits, increases in premium, the same way.

Just as with any risk-management evaluation, these measurements seek to capture the overall management picture. To paint this picture, insurance companies evaluate the following:

  • Accounting Measurements
    • Insurance companies analyze financial statements, credit reports, tax forms, and management control systems. Are these reports accurate and in compliance for an easy audit trail? Is the company candid about their finances?
  • Physical Risk
    • An untidy workplace suggests a lazy attitude regarding risk management. A neat and orderly work premises suggests pride in ownership and sound professional management. These conditions imply good credit and committed ownership.
  • Safety
    • Sincere interest in loss prevention includes a commitment to safety compliance. Indicators of such a commitment are seen in updated OSHA logs, having safety equipment on hand and up to date, and the proper installment of other loss prevention practices.
  • Human Resources
    • How does a company handle employee recruitment and training? For positions such as drivers, are applicants properly screened and trained? Do they possess an appropriate skill set and attitude towards loss prevention? Does the company offer ongoing training for such employees?  The insurance company desires evidence for ongoing skill and safety training for high risk positions and industries.

The company interested in long-term profitability does not skimp on loss control or maintenance. Easily administered systems remind employees and supervisors of their safety culture. Take a look around your business today and think about how you can earn a few more credits!

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