If you subscribe to the theory that in every problem there is an opportunity, use the reminder that the B&O tragedy presents to take a minute to examine your own risk management plans.

This board has been filled with posts concerning the problems associated with liability insurance in recent months,but there is another aspect to the insurance puzzle-property insurance.

There are a few good rules of thumb to use in selecting the type and amount of coverage.

1.) Get the highest limits of coverage you can. Just because you double a limit from 1 to 2 mil, doesn't mean the premium doubles. Large losses are relatively infrequent and so coverage doubled may only cost as little as 10-20% more, depending on the coverage.

2.) Get the highest deductible you can. You pay a lot for "lower end" coverage-because of thats where most losses are clustered. Some risk managers refer to low deductibles as "trading dollars" with the insurer.

The purpose of insurance is to cover losses you can't afford, so given a choice-take the policy with a high deductible and a high limit, rather than the low deductible and low limit.

3.) Get the broadest coverage you can. If "all perils" coverage is available, take it. Because there are many fixed costs associated with policy issuance-you might be surprised how little expanded coverage costs.

4.) Get professional help identifying, assessing and controlling your risk exposures. In the property casualty industry, look for professional designations such as CPCU (chartered Property Casualty Underwriter) or ARM (Associate, Risk Management).


superheater@rrmail.com

You make a good point on insurance, but I think you are leaving out one key point: People.

The members, and or employees, must be alert to potential disaster and then take steps to correct it. Case in point is a recent broken pipe we had in our office due to the extreme cold. It could have been a disaster from the stand point of lost historic art, records, and photographs (We have a large collection). But we knew that things like this happen and during the summer we rented a secure location for such artifacts.

Also, over the past few days, members were on the phones talking about our own structures and the load they are taking today and what they will take later this week if it rains. A group of us were at the Museum today checking things out, covering things up just in case.

So, what I guess I am saying is that maybe the best insurance is a proactive membership.

> If you subscribe to the theory that in every
> problem there is an opportunity, use the
> reminder that the B&O tragedy presents
> to take a minute to examine your own risk
> management plans.

> This board has been filled with posts
> concerning the problems associated with
> liability insurance in recent months,but
> there is another aspect to the insurance
> puzzle-property insurance.

> There are a few good rules of thumb to use
> in selecting the type and amount of
> coverage.

> 1.) Get the highest limits of coverage you
> can. Just because you double a limit from 1
> to 2 mil, doesn't mean the premium doubles.
> Large losses are relatively infrequent and
> so coverage doubled may only cost as little
> as 10-20% more, depending on the coverage.

> 2.) Get the highest deductible you can. You
> pay a lot for "lower end"
> coverage-because of thats where most losses
> are clustered. Some risk managers refer to
> low deductibles as "trading
> dollars" with the insurer.

> The purpose of insurance is to cover losses
> you can't afford, so given a choice-take the
> policy with a high deductible and a high
> limit, rather than the low deductible and
> low limit.

> 3.) Get the broadest coverage you can. If
> "all perils" coverage is
> available, take it. Because there are many
> fixed costs associated with policy
> issuance-you might be surprised how little
> expanded coverage costs.

> 4.) Get professional help identifying,
> assessing and controlling your risk
> exposures. In the property casualty
> industry, look for professional designations
> such as CPCU (chartered Property Casualty
> Underwriter) or ARM (Associate, Risk
> Management).


http://www.njmt.org
jrmay@njmt.org

> You make a good point on insurance, but I
> think you are leaving out one key point:
> People.

You are absolutely right. The "control environment" is the most important item in the preventative arsenal. I limited my comments to insurance because there was mention in an earlier post about common exclusions and of course, length.

I am considering doing something more comprehensive as an article.

superheater@rrmail.com