Q:If I have an Insurance Agent/Broker , doesn't their company perform the same services for no charge?
A:Theoretically yes, however your insurance agent is sometimes in the position of serving two masters. There are sales quotas they must maintain in order to keep their agency status with their companies. If they don't achieve certain sales levels the companies will cancel their contracts and your agent could lose the insurance company representation.
In addition to the above is the issue of commissions and profit sharing. Depending on the insurance company there are differing commission rates as well as profit sharing that could be impacted if the agent were to move your account to another company. Although the pricing and coverage may be better at another insurance company the move could be costly to your agent.
Q. How does Stanford Risk Management get paid?
You hire Stanford Risk Management as an outsourced Risk Manager. Our fees are unrelated to the insurance program, company, Agent or Broker. Our fees are either flat annual or hourly depending on your needs and preference.
Q. Can I expect insurance cost savings as a result of your services?
Usually yes. However, our focus is on evaluating your company's operations and identifying possible areas of potential loss. We use insurance as a last resort to handle the identified exposures to loss. Generally the insurance companies recognize the controls we have put in place and grant underwriting credits to reduce the insurance premium.
Q. Our agent/broker has handled our account for many years, can we still use their services in conjunctions with yours?
Yes. As an independent consultant we do not place insurance. We rely on Agents, Brokers and direct writing insurance companies to provide the actual insurance product. As part of our service, we draft insurance specifications that are distributed to qualified insurance Agents, Brokers and companies that provide the type of insurance being requested. This permits us to evaluate the resulting pricing against a known insurance product. If you prefer, we will work exclusively with your designated insurance person to modify the existing policies to achieve our goal of maximizing the protection for your company's particular insurable exposures. Generally the cost savings realized by a competitive bid are lost if this option is exercised.
Q. We have used insurance consultants in the past, how does your service differ?
The focus for most insurance consultants is on the insurance policies and pricing. We differ in that we focus on risk analysis and alternative means of handling exposures to loss, using insurance as a final resort, as opposed to a primary control. We achieve cost savings by improving your company as a potential insured as opposed to just "shopping" your insurance program.
Remember, all exposures to loss are not insurable, so those areas must be dealt with using other techniques.