My wife nods in agreement, but she also chortles somewhat at the approach I can take when securing the house and gardens. Some old habits never die, let alone die hard, and from many years working across the insurance, risk and security management industry, my often-chanted mantras mean that wherever there is something that needs to be insured (and that’s not everything-always) there is typically a way to reduce the likelihood of the loss occurring in the first place. This can be done by shrewd treatment either to the risk or indeed the threat itself.
The point of this opening statement is to show that risk treatment plans are not just the preserve of big business and the industrial world. Intelligent management of risk can occur just as easily at home and the smaller business, and the methods that can make a difference do not need to be over-complicated nor grand in size. Is that easier said than done? Well, it is in fact more easily done than said.
Since the mid-80’s, and let’s start in the mid-1680’s, much has been said about rewarding the client’s risk management efforts. In practice however, this happens best in a few certain areas and it is clear that more needs to be done for it to become standard practice within the Domestic and SME sectors.
Firstly, there needs to be a stronger understanding as to who is responsible for what and for it to be easier to identify and access suitable third-party service providers, i.e. those companies, aside from the brokers and insurers, that can help with your loss prevention efforts or be relied upon to respond in an emergency.
So, who can do what, when, and why and with what effect?
The four key parties involved are: You (yes, YOU are number one); the Risk and Security Consultant; the Broker; and the Insurer. I’d like to describe this arrangement as quadrangular, but it is not; some of the parties are only granted a 180° view.
An ideal starting point is for you to identify the threats to your ‘estate’ and consider how you might reduce the risks to your assets in the face of those threats. You know your business better than anyone, however, with an experienced security and risk management consultant you can achieve not only a clear idea of what’s in hand, but also use the consultant’s practical experience to start to form a treatment plan. Working in this way will help you to demonstrate to the insurers your working in the margin, you will also start to understand better your inherent capabilities to manage risk, all of which leads to a better negotiating stance. Don’t underestimate your existing skills. Many times I have been sitting with the Security Director of ABC plc who says that they have nothing in place to respond to a kidnap, only to emerge from the meeting a while later having guided them, with the lightest touch, to recall and consider the existing capabilities to construct a significant proportion of the protection, prevention and response function itself! Exactly the same principles apply to the smaller business and indeed the private family.
The divisions of labour and responsibility.
Knowing who does what, when and how in the first hours of an incident vital. “Look, just when exactly does Denzil Washington appear?”, I was once asked in jest! Well, it was at least a starting point for discussion. Also of course, and prior to anything being allowed to occur, it’s worth considering who is well-placed to implement credible preventative measures.
Now Let’s take this moment to list a small number of things could help you to re-engineer the insurance programme:
- Property: My staff have been trained in security awareness, they are visible on-site, and are regularly drilled on reporting and response protocols. They know who should and shouldn’t be on the property and can deal with a variety of incidents.
- Risk Register: If I have a clearly-defined risk register, and treatment plan, how can I use this to reduce my premiums and deductibles? How do I raise this with the broker or underwriter to ensure that I get the best deal for my efforts?
- Natural Disaster: If my estate is damaged by fire or flooding and I need personnel to protect the property while I am not in residence, I have identified a suitable organisation to do this so do I have to use the people sent by the insurance company?
- Cyber: I’ve taken advice and implemented a family-friendly set of rules for how we conduct ourselves online, now I want the cyber insurance policy to recognise these efforts.
- Travel: I always make sure that I have suitable protection in place and all our travellers are fully briefed not only on the journey and destinations, but also if something goes wrong? How can I have this reflected in my insurance policy, as the exclusions seem unfair?
- Overall portfolio of properties and persons: I regularly commission site security reviews and make sure that I carry out the recommended actions. This peace of mind comes at a cost, and I would rather it was seen in a premium reduction or other form of concession.
The broker and the underwriter.
At this point, you’ve begun to take much greater control of your side of the ‘bargain’. So, how can you know for sure whether or not you have the right sort of cover for your family and assets? Who is asking the right questions as to how you manage and secure your estate? In most regions around the world, it is enshrined in law that it is the broker’s duty to work with you to understand just what is and isn’t suitable. But this is quite an onerous task where brokers have many clients but too few hours in which to do this effectively. As for the insurers, they rarely have the luxury and benefit of true direct access to the insured and would need to work around a further degree of separation.
Cover (and premium): Made to your measurements.
It is of course understandable that no business wishes to throttle its potential income by removing the need for coverage, but it is also fair to expect that you pay only for that which you need, and that you are covered comprehensively and accurately.
Transparency, collaboration and understanding.
Finally, reverting to my references of the 80’s, it was of course in the late 1980’s that the Soviet Union nurtured ‘Glasnost’ as part of the country’s sweeping reforms and efforts to a nurture a form of democracy. By encouraging a little Glasnost in the insurance and risk management sector we should be able to have better communication of the risks, an understanding and acceptance of everyone’s roles and the improvement in the practical value of insurance coverage.