It’s been a difficult year for many businesses of all kinds due to the global pandemic and economic uncertainty. Although the insurance industry remains resilient, these challenges have added some complexity to a dynamic liability marketplace. And, for agents and brokers whose book of business includes high-hazard customers with hard-to-place risks, it’s especially onerous.
But where there are challenges, opportunities exist as well. So, what does the general liability landscape look like now and what can agents and brokers do to ensure the best outcomes for their clients?
Liability Market Characterized by Rising Insurance Costs and Diminishing Capacity
Entering 2020, the general liability marketplace was hardening after several years of insufficient rate, rising exposures and increasing claim costs. “Rates were going up and capacity in the excess and umbrella space was diminishing,” said Mike Low, head of Complex Liability Solutions at The Hartford. “The impact of Covid-19 added some complexity to an already challenging liability environment.”
Altogether, these factors combine to extend market conditions and upward rate pressure. And, for agents and brokers working with clients with hard to-place general liability risk, navigating this environment can be tough. Challenging market conditions bring an opportunity to manage costs through a variety of best practices.
Best Practices to Turn Challenges Into Opportunities
Against this formidable backdrop, there still exist a number of best practices to ensure you’re getting the best outcome for your clients with higher-hazard liabilities. The following can help:
- Relationships are based on trust – and are especially important in this environment – so be transparent with your clients and communicate early. “It’s crucial that brokers and agents understand the market dynamics their customers face and help manage their expectations accordingly so there are no surprises,” Low said.
- Start early and use quality data and submission information to help tell your risk story – “Just because you are in a higher-hazard industry or business doesn’t make you a bad liability risk.” A complete submission helps eliminate the guesswork for an underwriter and highlights your risk management and loss control practices. Also, leverage your insurance carrier’s risk engineering and claims services to provide a tailored program for your unique operations to help mitigate risk.
- Examine your marketing activities – including social media strategy, to make sure they are measured and appropriate. All should be vetted by legal counsel. Similarly, consider a comprehensive reputation management strategy to measure the public sentiment and customer experience in regard to your services and company in general. “You may have a brand strategy and a marketing strategy, but a reputation management strategy is equally important, as it lends insight into public sentiment around your product or service,” said Low.
- Be open to larger retentions – Certain insureds may benefit from moving from a deductible or guaranteed cost program to a self-insured retention. Moving to a SIR illustrates to an insurance carrier the desire to control costs and invest in risk management. The premium savings can also be material.
A Strong Partnership Makes All the Difference
While this year has been at once unsettling and trying, it has also shown where opportunities exist – opportunities to fine-tune operations, opportunities to connect with and better serve customers, and opportunities to broaden your book of business to address new risks and high-hazard liabilities.
Working with a trusted partner like The Hartford can enrich your existing business and spark new business growth. The Hartford’s Complex Liability Solutions team of underwriters, risk engineering consultants and liability claims specialists are experienced in working with clients with high-hazard liability exposures, including hard-to-place products and premises operations risks.
“We have a dedicated team that helps agents and brokers find admitted solutions for their high-hazard clients and have a broad appetite for unique and hard-to place risks,” said Low. “We can help you tailor a general liability and supported umbrella program that’s right for the insured.”
For more information, please visit us online at thehartford.com/specialization.