How building a culture of safety translates to lower insurance premiums
Crisis, catastrophe, headache and disaster—these are just a few of the terms that waste companies usually use to describe their commercial insurance renewals. According to Business Insurance Magazine, premium prices in the United States increased by 10.4 percent in the fourth quarter of 2019 and have continued to skyrocket into the first quarter of 2020. In our practice alone, we have companies calling us days before renewal stating their premiums have gone from $300,000 to over $1,000,000. Commercial auto, property and excess umbrella are the lines we are seeing which are the most challenging to obtain and to get an affordable price for.
Insurance market premiums are cyclical, and premiums have been historically soft for the past 15 years. During this period, waste companies were able to purchase cheap insurance without much oversight. This fact deterred companies from examining their operational protocols and addressing numerous underlying issues. With claims far exceeding premiums the last few years, insurance carriers are no longer willing to write “cheap” insurance. Consequently, this has created a hard market. The axiom, “The chickens have come home to roost,” accurately describes the current situation in the commercial insurance market. Because of this reality, waste companies must be prepared to do whatever it takes to help improve their safety culture, which will in turn, significantly lower premiums.
Industrywide, we must focus on strategies that will improve the claims experience. Safety has always been mentioned as being the No. 1 most important aspect of company culture; however, actions do not support this claim. Before becoming a commercial insurance agent, I was a practicing health and safety professional. I visited multiple companies in all sectors of business, met with many respected members of management, and noticed a common denominator—people. There is not a business owner on the planet who wants a poor safety record, high workers’ compensation losses, or massive increases in insurance costs; yet, the reality is that owners have the most significant impact on whether their company is safe or not and many simply don’t take proper action.