Liga Asuransi – Dear readers, how are you? Hope your business and family are all well.
Let’s continue our discussion about risk management and insurance, this time we will discuss who should be responsible for taking care of insurance coverage in a company.
Handling personal insurance coverage is different from handling a company’s insurance. For personal insurance, it can be decided by yourself, but for a company’s insurance where the risks are more complex and the consequences of risks that occur are also more complex, special insurance arrangements are needed.
As a senior insurance broker, we find that there are many ways of arranging insurance that is not appropriate so that when there is an accident the claim cannot be paid by the insurance company or if it is paid the value is not as expected.
For this reason, this time we want to provide insight to the company’s owners and the company’s board of directors to arrange company insurance in a more appropriate way so that the company gets maximum protection to provide peace of mind.
Please note that the owner and directors of the company are the parties who are most interested in the protection of the company.
You need to know that the issue of insurance is as important as borrowing money from a bank where to get a loan the owner and director must be involved and responsible.
Insurance coverages are just as important as loans in banks. When an accident occurs that causes major losses, the owner and director also need to claim money from the insurance company to compensate for losses.
Therefore, the owner and director need to take responsibility for the company’s insurance coverage so that their insurance claims can be paid.
The concept that the owner and director are responsible for taking care of insurance has been widely applied in the construction sector known as the Owner Controlled Insurance Program (OCIP)
But the reality is that in other industries, directors are rarely involved in making insurance decisions, many of which leave it to the finance department, the purchasing department, the legal division, the operational part, and even to the marketing department.
Here we explain some of the disadvantages if insurance matters are not handled by the owner or director of the company.
Finance Department
In our experience, most companies in Indonesia leave insurance matters to the finance department. Administratively, this method is relatively more appropriate because the insurance policy is managed by the department that is most interested in insurance.
The disadvantage is that because most of the mindset of the financial division staff is “cashflow” then they tend to get insurance coverage at the lowest cost and pay less attention to the extent of the insurance policy coverages, the quality of the insurance company used and the consequences in the event of a claim.
You need to know that the insurance also applies the principle of “there is money there is goods” or “money does not lie”. Well, if you pay with a premium at the cheapest cost then there is a chance that you will get a low limit.
Remember, insurance companies also have costs like other industries. The difference is that insurance companies can still issue insurance policies even though the reinsurance backup is still unsettled. Remember the cost of premiums is very important for insurance transactions.
If you only consider the lowest premium, there is the potential that you will buy from an insurance company that is “premium hungry” where they need a lot of premiums perhaps to improve their financial condition even at a price far below the market price.
Or, the insurance company is not in the category of first-class security or the best guarantor, especially from its financial capabilities.
Well, if there is no accident everything is fine. However, problems only arise in the event of a major accident. If the insurance claim is rejected for various reasons, even if the accident is covered by the insurance policy but the amount of claim is far from what was expected. The payment realization time is also long and even in installments. That’s a big deal.
Purchasing Department
Almost the same as the financial department, the purchasing department also has the same working principle, they are looking for the lowest price and not caring so much about the quality of insurance coverage, the level of security, and the impact in the event of a claim.
Legal Division
As is already known that an insurance policy is a contract between the insurer and the insured that contains various legal terms and conditions that must be followed.
The legal division will pay attention in detail to each of the provisions, exclusions, limitations, and additional requirements of the insurance policy. They will add, increase the limit, and ask for an expansion of the coverage until the insurance policy can cover all possible risks that can harm the company.
As a result, the insurance guarantee is too wide, and the cost of premiums becomes higher.
Operations Division
It’ is different if the insurance is handled by the operational department because they recognize almost all the potential risks that can occur due to business operations, so they want every potential operational risk that exists to be protected by the insurance company.
The existing limits and requirements if requested are changed and adjusted, because of which the guarantee becomes wider and as a result, the cost of premiums becomes greater.
Marketing Division
Unlike the marketing department, they do not delve into the potential risks that exist and do not know the impact of the premium value on the company’s finances.
The people in the marketing department prioritize “good relationships” with business partners or potential clients and when the associate recommends an insurance company, they will consider it to maintain a good relationship.
Things that the Owner / Director needs to know to buy insurance guarantees
For the company to get the maximum insurance guarantee, efficient costs, and guaranteed by the strong insurance company, it is necessary to know the following:
Know the History of Insurance Companies
Before you make a choice, do some research, and learn about the reputation and history of the insurance company. This information can also give you insight into their character. Things to consider are:
- What is their performance on paying claims
- How does the public perceive this company
- How long have they been in the insurance business
Financial Capability
According to experience, if insurance companies for various reasons avoid paying claims, then it can be ascertained that they have problems with finances.
Insurance Premium Price
Price is important, and you may want to choose at a low price but be careful that you get what you pay for.
Remember that the cost of insurance premiums varies among insurance companies. Lower premiums may be attractive, but it may also be a sign you’re getting fewer and limited guarantees and inadequate service.
On the other hand, higher premiums offer a more comprehensive guarantee with a strong insurance company that is committed to providing a better customer experience.
Remember, the premium fee is calculated by adjusting to the level of risk you face.
Choose an insurance company that provides insurance protection that suits your needs. You need to ask what is covered and what is not covered. Ask for an explanation of the ‘exception’ before you sign the agreement. This will prevent disappointment if you make a claim on your policy later.
The most important question to ask about an insurance company is simple, will that insurance company pay the claim an adequate amount and on time?
This question is arguably the most important question when choosing an insurance company.
It reflects financial strength. When you choose an insurance company, you want when it’s time for you to file a claim, they can pay it as quickly as possible.
Reference
If an insurance company is recommended by many of its clients, it indicates it is a good option. Talk to other policyholders about their experiences or check out their websites or social media pages to read honest reviews.
Customer Service
Does your insurance company have a customer service representative to provide information about the service or assistance in situations where the customer needs that personal touch?
When you need someone to guide you through the process of deductibles, claims, or renewing a policy, it’s good to know someone is accessible. Representatives with information are only one call or email away, especially when you need that information quickly.
How to choose the right insurance company?
As explained above, it is not easy to choose an insurance company that will cover the company’s risks.
Knowledge of the types of risks faced by the company is required, the right type of insurance, extensive insurance coverage, efficient premium costs, capable insurance companies, and in the event of a claim that the payment is smooth.
Frankly, there are not many owners, directors, and managers of the company who have such extensive insurance knowledge and experience.
The solution is using the service of an insurance brokerage company. An insurance broker is an insurance consultant who has been certified as an Insurance Expert recognized by the Financial Services Authority (OJK) and the National Professional Certification Agency (BNSP).
An insurance broker will design an insurance program according to the character of your business. Negotiate with the best insurance company based on the “security list” to avoid problems in claim settlement.
The insurance broker with its wide relationship within the insurance industry is capable to negotiate insurance premiums at the most efficient cost and most importantly the insurance broker will help his clients to settle claims if they occur at their maximum value and in a short time.
One of the leading insurance brokerage companies in Indonesia is L&G Insurance Broker. For all your company’s insurance needs contact L&G now
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LOOKING FOR INSURANCE PRODUCTS? DON’T WASTE YOUR TIME AND CONTACT US RIGHT NOW
L&G HOTLINE 24 HOURS: 0811-8507-773 (CALL – WHATSAPP – SMS)
website: lngrisk.co.id
E-mail: customer.support@lngrisk.co.id
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