The hard property insurance market has been tough on food-and-beverage companies. If you have a difficult loss history or are located in a natural hazard region, you’ve probably seen heightened scrutiny from underwriters as well as high increases in premiums.
Global commercial insurance pricing rose for the 21st consecutive quarter in Q4 2022. Commercial property insurance is expected to keep surging in 2023 due to a confluence of factors like natural catastrophes, inflation, and supply chain delays.
Still, there are several ways that food-and-beverage companies can approach insurance carriers to get the best possible terms and conditions. These include:
- Conduct a risk assessment: Identify food safety risks, supply chain risks, reputational risks, and more during a risk assessment. This will help them to understand their insurance needs and communicate them effectively to insurers. Underwriters favorably view reports from reputable independent risk engineers.
- Present accurate, thorough risk data: Underwriters are asking for an increasing amount of data about your risk profile. Having data about risks and hazards allows companies to identify potential hazards and implement measures to mitigate them. Doing so not only reduces the likelihood of incidents occurring and minimizes their impact – it also shows insurance companies that you are proactively mitigating risks. Data can be the difference between securing coverage or a carrier passing on the risk.
- Implement safety measures: Implement safety measures and procedures to prevent contamination, reduce the likelihood of accidents, and minimize the impact of any incidents. This will demonstrate to insurers that they are taking steps to mitigate risks and reduce the potential for losses.
- Focus on sustainability: Customers and underwriters want to see efforts made to be more sustainable in the ways food-and-beverage companies handle their processes.
- Maintain accurate records: Safety measures and procedures, incident reports, and insurance claims history are just some of the data points that are important to track. This will help insurers to assess the company's risk profile and offer more favorable terms and premiums.
- Shop around: Compare insurance coverage and compare quotes from multiple insurers to find the best coverage at the most competitive price.
- Create a culture of safety and risk management: With thorough training and procedures, companies can create a good safety culture, and risk management program that works for managers and employees. This will help insurers to understand that the company is proactive in managing risks and reducing potential losses.
Risk engineering can help. Risk engineers can assess your property and processes to deliver detailed recommendations aimed at improving safety and reducing loss potential. It gets underwriters’ attention and can lead to better terms and conditions.
TÜV SÜD Global Risk Consultants has delivered more than 400,000 risk recommendations representing nearly $700 billion in loss exposure reduction. If you’re interested in learning how risk engineering can help your business, contact us now.
