Noreen N. Salas is the executive vice president of risk management at Royal Marine Insurance Group and has more than 20 years experience in the insurance industry. She joined Royal Marine in 1988 and has held various positions, including senior underwriter, program manager and division/product manager.
Q. What types of insurance should companies be covered under today?
Mandatory coverage, such as workers’ compensation and automobile coverage, should be a top priority. Second, depending on the type of business for example, consulting, manufacturing, etc. one should purchase coverage to protect against those losses that may be incurred as a result of the services and/or products being offered.
Q. How often should you review your products and views on risk management?
The review and audit of insurance exposure should be an annual exercise. In addition, when operational/business changes are made, whether it be downsizing or an expansion, there should be an in-depth evaluation of one’s insurable risk to ensure that coverage is in line with the exposure. This exercise will often reveal that certain coverage may no longer be necessary, thus resulting in a possible savings.
Q. Are companies facing different risks with the present state of the economy?
In today’s economy, a company can be exposed to a myriad of risks. Often, companies risk leaving themselves underinsured and exposed as downsizing and budget cuts become necessary. Insurance is an area that may be overlooked when a company seeks to trim costs. The volume of business might not be there anymore, but the risk remains; therefore, it is important to consider other options. Another area of concern lies with independent directors serving on the boards of public, private and nonprofit organizations. Directors and officers coverage provides financial protection for independent directors. If there is coverage in place, ensure it is the correct coverage and not just any form of a traditional D&O policy. Consult with your insurance agent on these topics, including requesting an evaluation of your risk/loss control measures. Additionally, workers’ compensation claims and discrimination allegations increase in the current economic conditions. Companies then incur the steep litigation costs to defend and investigate those claims.