In this day and age, insurance is a very important line item for businesses. And you don’t want a broker who is unable to deliver results.

Managing Director David Toth, of Momentous Insurance Brokerage, Inc., says it’s critical for your insurance agent or broker to be familiar with your specific industry. If you make widgets, the broker should have experience with manufacturers. If you’re running a hospital, the broker needs experience in the health care industry.

“Experience and past performance of underwriting the business successfully is key,” he says. “You don’t want to be a guinea pig.”

Smart Business spoke with Toth about how to vet and ensure good service from your insurance broker.

What should you be looking for and asking about when vetting a new agent?

Use the vetting process to make sure you have a broker who understands your business, is responsive and shows flexibility. For example, in the entertainment field, you need special insurance enhancements and carefully crafted policy language to ensure the broadest coverage possible. You also need a broker who is capable of adhering to your wishes — it’s not how the broker wants it, it’s how the client wants it.

Ask for referrals, which most brokers are more than willing to share, rather than depending solely on a firm’s website. Also take time to meet the key people in the firm.

Inquire thoroughly about what insurance markets are available, because the more competition the broker can foster for your insurance, the better your program. In addition, inquire whether people from the brokerage sit on any of the governing boards of the carriers they represent, as this means they have influence on policy decisions and/or claims procedures.

One more point of qualification to ask a new broker is: What limit of errors and omissions insurance do you carry? If the brokerage only carries $1 million, is this enough if a broker’s mistake results in a loss to your business? Keep in mind this is the limit they carry for all clients in the firm.

Are there ways to tell if an agent provides good service?

It depends on whom you ask. Some clients might place responsiveness at the top of the list, while others need to be kept abreast of changes in the industry, including trends with insurance prices. So, for example, is the agent sharing the upcoming changes with the Patient Protection and Affordable Care Act? Has the brokerage advised you that if you’re in California your workers’ compensation rates might increase because of changes with the insurance code? Do you already know that with insurance carriers exiting the California management liability market, those lines could increase dramatically?

Other service concerns are:

•  How does the agent keep you up to date on the claims process? Does he or she regularly follow up?

•  What does the broker do in terms of your premium rates? Is he or she doing all he or she can to obtain the best rates for you?

•  Is the agent delivering the renewal two weeks prior to renewal, or waiting until the last minute? Do you feel as if you are part of the process and have control?

• How available is the agent? If it’s important to you on a Saturday, it should be important to the broker on a Saturday.

How do you know whether to stay with your current broker or to move on?

Loyalty is a great thing, but it doesn’t hurt to have another set of eyes. Ask an independent insurance broker to review your insurance program — usually at no cost — and make sure you don’t have duplicate coverage or coverage gaps, while double-checking for extra benefits and/or cost savings. And if someone else can’t improve upon your insurance policies significantly, it confirms that your current broker is doing a good job.

David Toth is managing director at Momentous Insurance Brokerage, Inc. Reach him at (818) 933-2721 or

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The Patient Protection and Affordable Care Act regulations are changing every day as the legislation continues to roll out. Each of these new provisions has an impact on many aspects of a company — from employee retention to the bottom line. In this constantly changing environment, business owners need health insurance brokers who are health care reform experts to guide them through each new complex step. However, this means brokers need to prepare themselves for a new role.

“Change is hard for many brokers to implement,” says Sherrie Zenter, senior vice president at Momentous Insurance Brokerage, Inc. “Brokers need to get past this fear of change to avoid failing in the current marketplace. Revenue will continue to diminish with health care reform changes, but those who distinguish themselves as experts will rise to the top and succeed.”

Zenter says business owners are concerned with how new regulations will affect them, their employees, what the costs could be and their responsibilities as employers. By choosing a health insurance broker who is knowledgeable, available and a good communicator, business owners can stay well informed.

“Brokers exist to help their clients. Therefore, the ones that help their clients understand the bigger picture and adapt to the reform changes quickly will help everyone succeed,” she says.

Smart Business spoke with Zenter about what to look for in a health insurance broker.

How should business owners gauge the effectiveness of their health insurance broker?

Business owners must work with health insurance brokers who are well informed to give them the most up-to-date information on health care reform. There are several indicators that your broker can be an asset to your company:

• He or she tells a good story by using education tools, such as webinars and/or seminars, that help you understand the issues well enough to make intelligent decisions for your business.

• He or she is available to react quickly when you ask for information. Your broker should have current literature at hand and deliver it to you in a timely manner.

• He or she maintains a viable network of experts in the health care community to stay current with new regulations and how each could impact your business.

• He or she serves as your go-to leader on health care reform.

It can also be beneficial if your broker’s associates in his or her firm are educated as well. That means there is a greater pool of knowledge that you and your broker can tap into.

What else do brokers need to demonstrate in this area?

Brokers need to demonstrate that they are well versed on this topic, and it should be clear that they take the time daily to learn about changes put in place as this legislation unravels in the marketplace.

Your broker’s skills should position him or her as a trusted adviser and expert on health care reform — someone you’re willing to rely on when making decisions that will impact many levels of your business.

What’s the current health insurance marketplace like?

There is a lot of competition among brokers. As they adapt to this new landscape, they are developing new servicing models. This can be a benefit to business owners who can leverage the competition and take advantage of the new skills brokers are developing. Some brokers are leaning toward ancillary sales, while others are focusing on large group sales versus small group. Bottom line, brokers have taken a cut in commissions but are still striving to maintain the quality of service promised to all clients. Business owners can benefit from brokers who are eager to stand out among the competition and prove they are an asset to their clients and their businesses.

Sherrie Zenter is senior vice president at Momentous Insurance Brokerage, Inc. Reach her at (818) 933-2739 or

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As your business needs and values change, your insurance policies need to be updated to ensure your company is properly covered.

A comprehensive risk assessment should be conducted at least every other year. This need often comes up when you’ve been with a broker for a long time, or if you switch brokers based on pricing and not added value, and the new broker copies incorrect information, says Eric Kerensky, sales executive at Momentous Insurance Brokerage.

“When I make an assessment appointment, I gather their current policies and review them line by line to make sure the values are up to date, such as personal property, building values, locations, fleet list, driver’s list and any operation changes that may have occurred,” Kerensky says.

Smart Business spoke with Kerensky about what’s included in a comprehensive risk assessment and how it helps your insurance bottom line.

What are the major advantages of an insurance assessment?

It gives you peace of mind that your broker is doing his or her job, properly covering all the risks in your particular field. It’s the worst feeling in the world when you pay for insurance and find out later a claim is not going to be covered. These assessments help safeguard you against that. You may want to have a specifically designed insurance plan, not just the standard issue insurance policy for the overall type of industry.

The assessment could also lower your insurance costs, especially if you might unknowingly have double coverage. You could even get a different line of coverage that covers something for which you currently pay extra. For example, each time a distribution company ships, it buys insurance through its common carrier, as opposed to buying a cargo policy. The cargo policy could be cheaper, depending upon how much is annually shipped, or broader, providing cover on the job location — eliminating the need to put it on the property policy — and for earthquakes.

What are some broker services that the assessment checks?

When conducting the comprehensive insurance review, you can discover if your broker is providing services like helping put a disaster plan in place. As another example, it may be worthwhile to have your broker and carrier do a site risk appraisal to lower re-occurrence of property claims or slip-and-falls.

Additionally, does your broker conduct a semi-annual client review? You don’t want a broker who just comes out at the end of the year to pick up the check. He or she should review your sales activity, which affects your general liability premium. If sales have increased, you don’t want to be faced with a large, year-end audit, or if your company is not hitting anticipated sales, you have the ability to adjust the policy and increase your operating cash flow.

How does the assessment audit the business operations?

The review will look at all business operations. If you’ve added or discontinued a service or business activity but haven’t communicated that to the insurance carrier, a claim could be denied.

It’s very important that your insurance carrier knows every time your company is named as an additional insured by another entity, usually in the form of a certificate of insurance they provide to you. This reassures underwriters and could lead to lower rates on your policy. For example, as the distributor, named as an additional insured on the manufacturer’s policy, your company isn’t liable for product malfunctions or recalls. Copies of all additional insureds on record should be passed along to your broker.

How does an assessment of claims impact the cost of risk?

The assessment should examine your claims activity. One important example is with workers’ compensation. Because rates are projected to increase, you want to ensure claims are getting closed promptly so they don’t get stuck in your reserves. Since many insurance carriers reserve more than what will likely be paid out, this inflates your claims amount and increases your overall workers’ compensation premium costs.

Eric Kerensky is a sales executive with Momentous Insurance Brokerage. Reach him at (818) 933-2711 or

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You write the renewal premium check every year, but did you know that not having your medical malpractice (medmal) policy reviewed could be costing you even more money?

In general, health care costs are increasing, insurance reimbursements are declining and malpractice premiums are constantly changing. This all spells opportunity for health care related businesses to have their policies reviewed by a qualified broker, says Chris Ferraris, a medical malpractice expert at Momentous Insurance.

Another benefit of the policy review is to make sure your business is protected.

“Without proper insurance, you may as well be prepared to reach into your own pocket to pay for legal costs should a lawsuit be brought against you,” he says. “That can drain your business entirely. And that’s just the economic damages.”

Smart Business spoke with Ferraris about reasons to review your policy annually.

How does a review keep you from paying too much?

Medmal insurance carriers often change premium rates. To remain competitive and to increase their market share, carriers may lower rates and/or loosen underwriting guidelines. When a broker who specializes in medical malpractice reviews your policy, he or she knows whether better rates are available and shop the marketplace on your behalf. This analysis drastically reduces the risk of overpaying for the coverage you need.

Why might you be lacking the necessary coverage?

Medical malpractice insurance companies also change policy forms, which can restrict or enhance coverage. Without an advocate it can be difficult to determine whether your policy includes every coverage enhancement for which it is eligible.

Sometimes carriers exclude certain procedures or treatments because of changes in state or federal laws, or at their own discretion. If a claim arose as a result of a procedure excluded from coverage, the carrier could deny the claim. Furthermore, you might be lacking the necessary coverage if your policy was not written properly from the start.

What if your practice profile changed since you applied?

It’s not just carriers that make changes, health care practices are constantly evolving and their insurance needs are evolving as well. Whether getting a new piece of equipment, offering new procedures or adding locations, any change can affect coverage.

It’s the responsibility of the policyholder to notify the carrier of any changes in business practices. If an undisclosed item results in a claim, it could be denied.

How do staff changes affect your insurance?

Changes to the staff, including medical directors, are the reporting responsibility of the policyholder. If a claim is filed as a result of an uncovered employee, independent contractor, volunteer or other health care professional, there could be no coverage.

How does a review improve your chances of getting claims paid?

Reviewing your coverage needs regularly with your broker helps avoid potential complications, and ultimately improves your chances of getting a claim paid. Also, having an advocate in your corner means you have someone looking out for your best interests, not the interests of the insurance company.

In summary, the five key reasons to review your policy on an annual basis are:

1. You could be paying too much.

2. You could be lacking needed coverage.

3. Your practice profile could’ve changed since you applied.

4. Your staff could’ve changed.

5. To improve your chances of getting a claim paid.

There’s no time like the present to request an independent review. If you haven’t had a review in over a year, we urge you to take action and contact your broker today. Having proper coverage gives you greater peace of mind and allows you to focus on your patients and business — where your time and energy should be dedicated.

Chris Ferraris is a health care risk management consultant at Momentous Insurance Brokerage, Inc. Reach him at (818) 574-0424 or

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If you recently reviewed your workers’ compensation insurance renewal bill, you likely shared in the same experience of shock and dismay as many other business owners who saw sizable increases in premium. If you have not yet received your increased renewal bill, rest assured, it’s coming, says Tage E. Peterson, Commercial risk consultant with Momentous Insurance.

After the passage of the Workers’ Compensation Reform Senate Bill 899 in 2004 under Gov. Arnold Schwarzenegger, California businesses enjoyed reduced workers’ compensation premiums.

“This was a welcomed reform considering the subsequent economic challenges, where the trimming of business costs was celebrated across every industry,” he says. “While our economy has yet to fully recover, premiums are starting to rise again, upwards of 15 to 20 percent. Many business owners are scrambling to figure out a viable plan to manage this increase. After all, the extra bags of money are simply not laying around in accounting to hand over to the insurance companies.”

Smart Business spoke with Peterson about what businesses can do to mitigate these higher premiums.

What is the history of workers’ compensation in California?

The passage of the Workers’ Compensation Bill in 2004 was a much-needed answer to the cries for help from California business owners. At the time, workers’ compensation rates were out of control with year-over-year increases tipping as much as 25 percent. Businesses had to make tough decisions to keep their doors open, including relocating to other states where the costs to operate were more affordable.

With the passage of a single bill, the complex system of handling claims changed, producing immediate results that greatly reduced the insurance companies’ claims costs. The insurance companies worked to see how much they could reasonably drop pricing to gobble up market share from their competitors. Seemingly overnight, California business owners experienced much-needed relief in their insurance budgets, while the insurance companies couldn’t slash prices quickly enough. From 2004 to present, the bill is associated with overall decreases between 50 to 60 percent for businesses.

Why the increases now?

The saying goes, ‘What goes up, must come down.’ Unfortunately, the opposite applies in the insurance world — what went down eventually had to go up. The insurance companies, in their price slashing fury, eventually discovered where the pricing floor existed — some too late. Many insurance companies are now filing for rate increases with the California Insurance Commissioner to cover the increase in actual workers’ compensation claims. Those rate increases are being approved and passed on to the business policyholders. For 2012 renewals, you can expect to see workers’ compensation increases averaging between 15 to 20 percent.

What you can do to help your business?

Time for a shopping spree — The insurance market is changing. The workers’ compensation insurance companies that were well known for delivering the lowest rates for years are not necessarily the ones leading the way in 2012. If your insurance program is on autopilot with your insurance broker, they are doing you a disservice. Now more than ever, the value of shopping your insurance is producing staggering results. Shopping your insurance will help you discover who is looking to win your business with more reasonable pricing. If your insurance broker is not putting in the work for you to shop the market, it may be time to infuse a little competition into the mix.

Manage claims and experience mod — The double-edged sword that is your company’s experience modification factor (ex mod) plays a large part in the cost for your workers’ compensation insurance. This is your business’s merit rating system tracked by the Workers Compensation Insurance Rating Bureau that can provide you with incentives for controlling your work-related injuries, or penalize you for excessive claims. Controlling your claims can reduce your ex mod, determining your ultimate debit or credit pricing.

If you have pending claims open, work to close these before your next ex mod is released. Not every claim can be closed due to specific circumstances but certain ones can if responsibly followed up on and resolved. This can eliminate a sizable reserve held by the insurance company that negatively affects your ex mod and your renewal pricing. Monitor all open claims to make sure you are receiving the most favorable rating.

If your business has a high experience modification, you should be meeting with your insurance broker regularly to review all of your claims. Together you can develop an action plan that addresses the recurring injuries, frequency of claims and identify hazards in your operation that can be remedied. If your insurance broker is not partnering with you when you need them most, you should be concerned. Keeping your finger on the pulse of your claims and workplace safety is the best way to manage workers’ compensation costs.

Safety plans pay dividends — A safety plan consisting of regular employee safety meetings to reinforce best practices, combined with bonuses or prizes for safety benchmarks, creates an organizational focus on safety, resulting in reduced claims and oftentimes, additional insurance credits. While the investment in a good safety plan may take time and a little money, the dividends can equate to saving thousands or tens of thousands of dollars in premiums.

Whether in a great economy or a weak one, every dollar saved on your insurance is a dollar earned. Make sure your broker is getting your business the biggest bang for your insurance buck. Finding a qualified broker to work through the ‘pain’ and manage your premiums is one of the best plans you can make for 2012.

Tage E. Peterson is a commercial risk consultant with Momentous Insurance. Reach him at (818) 453-9643 or

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