A national Canadian general brokerage realizes the insurance it was buying for decades was not tailored to its business model, and as a result changed its insurance purchase to better protect the company and reduce its Total Cost of Risk, all while reducing total premium.
Challenge
Management and the Board of Directors of a privately held national Canadian general brokerage were faced with a challenge when they were approached by an insurance broker promising them protection against client suits through D&O insurance, unlike what their ‘then-current’ insurance broker was offering them.
Discovery
Using our proprietary methodology we analyzed the D&O policies proposed to the client by the two brokers. Our conclusion was that neither policy was structured properly and the ‘new’ broker was falsely misrepresenting coverage. The ‘new’ broker had missed operational details that made all the difference in how insurance would respond to a loss scenario, and the ‘old’ broker had omitted important elements of coverage based on the company’s ownership structure.
Impact
We implemented a broker selection process to select a broker best fit to the client’s size and business model. The process included 8 brokers with different profiles and we ranked them based on pre-determined criteria. Once a broker was selected, we structured a D&O contract to fit the client’s Operational Risk Profile and asked the assigned broker to find an insurance company to take on the risk of the structured product. We illustrated to the client, in detail, how the newly structured product was more operationally suitable for them, and one that could be triggered to pay out more often.