The Big Lie II in Professional Liability Insurance – Debunking the excuses to get better premiums and terms. In my previous blog The Big Lie in Professional Liability Insurance, I urged you to ignore the naysayers and instruct your broker to shop your professional liability insurance aggressively every year. In this post, I will address the three most common excuses why people erroneously don’t take my advice.
1) “But won’t the insurance companies not look favorably to our application when we really need them?”
This argument is flawed for two reasons: First, you never know which year you will “really” need them. Insurance underwriters are unpredictable and inconsistent in their business appetites, often switching the personnel reviewing your account from year to year. Second, insurance companies are not sensitive beings – they are all business – all the time, and will not prejudice your application in future years due to past not accepting their offers.
2) “But won’t our current insurance company become hostile when they are told in the negotiation that we are entertaining other offers?”
Not at all. Insurance companies have demonstrated to me for 15 years, how their best terms are given when we present them with viable alternative insurance companies. Consistently, they lower premiums and give better terms (like deductible and defense cost options) only after being presented with viable alternatives for their insureds.
3) “But isn’t the shopping process a lot of work for a low probability of actually moving?”
Yes, it is a lot of work for a low probability of actually moving – FOR YOUR BROKER. The shopping process should be a minimal amount of work (less than 1 hour) extra beyond the regular process for you, but a lot of work for your broker. That is their job. If you feel your broker isn’t aggressively doing this every year, fire them immediately.
Given the uncertainty and constant changing in the professional liability insurance market, you must have your broker shop your insurance zealously each year.
