How do healthcare providers manage today’s hard market conditions for medical professional liability and other insurance?
Since late 2019, the insurance market has tightened for healthcare providers—especially for small and medium-sized medical practices. Insurers have increased premiums and restricted the number of policies they underwrite.
Market conditions have been particularly hard for medical professional liability (MPL), management liability, property, and cybersecurity insurance.
If you’re a healthcare provider and you want to fight against insurance cost increases, you need to take a proactive approach to your insurance renewal process.
6 Best Practices to Follow—Before You Renew Your Insurance
Based on our experience, here are six best practices that you should follow during your insurance renewal process. These steps will help you minimize your insurance costs:
- Start your insurance renewal process early. Time is an asset that works for you as an insurance buyer. The more time you have to review options, negotiate terms, and make changes, the better your outcomes will be. Depending on the scope of your insurance program, you should start planning for your insurance renewal 90–180 days before the renewal date.
- Create a plan with your broker and stick to your timeline. Your insurance broker is responsible for creating a renewal action plan, including a timeline. But ultimately it’s the joint responsibility of you and your broker to stay on track with the process. Be sure that your insurance renewal action plan includes the following elements:
- An overview of your current insurance program
- A summary of your previous renewal costs and terms
- An update on market conditions for each line of insurance you need
- An update on your risk profile, including any changes in your risk exposure
- A clear statement of your insurance renewal goals (and corresponding strategy
- A clearly defined timeline for meetings, considerations, and decisions
- Create a narrative. Take control of the conversations you have with potential insurers. With the help of your broker, develop a cohesive, compelling story that highlights why you and your organization are good risks. For example, you might focus on details about your pre- and post-claim risk controls. You or your broker should also try to schedule face-to-face meetings with underwriters. An in-person connection can build rapport and help you “sell” your narrative effectively. But even if you don’t meet with an insurer, you can still include your written narrative as part of your underwriting submission.
- Evaluate program options. Consider the value of different insurance program structures. Ask your broker what options would be desirable for insurers, and include those options in your underwriting submission. Some options to consider include:
- Increasing or decreasing your deductibles or retentions
- Changing your limits or sublimits
- Changing coverage terms
- If you have a claims-made policy that might not be renewed, consider purchasing a “tail” to extend the claims reporting period
- Review available credits and discounts. Ask your broker what premium credits or discounts might be available to you. Don’t overlook any opportunities to apply for new credits or discounts.
- Evaluate premium financing options. Does your insurance carrier allow you to pay in installments? If not, can you get premium financing? And what are the interest costs vs. the cash flow benefits?
Many factors outside your control impact the insurance market, of course. Insurance carriers align rates with industry-wide loss costs, and market conditions dictate underwriting standards.
But each insurance renewal—including yours—has a unique set of circumstances. And in today’s hard market conditions, it is critical that you actively engage in the renewal process. That’s the best way to fight against insurance cost increases while you ensure risk coverage for your organization.