Precision Protection

Going for Brokers

The value of specialization extends beyond the policies you purchase for your company, says Al Annexstad, chairman, president, and CEO of Federated Mutual. “An uncovered insurable property or liability exposure can be devastating to a business,” he says. “A specialty carrier is more likely to understand such exposures and have developed not merely proper insurance coverage, but also programs and re- sources of loss prevention and safety assistance that can help the business owner avoid losses in the first place.” 

Klein describes St. Paul Travelers’ approach to specialization as a three-legged stool. The underwriting “leg” helps ensure that buyers are equipped with coverages that match their exposures. The risk-control leg assesses a company’s risk and helps it reduce its exposure by developing workplace policies and procedures aimed at minimizing risk. One example is helping business implement disaster- recovery plans. Finally, a claims leg provides the expertise necessary to appropriately defend and settle claims on behalf of customers, and to ensure that payouts are adequate but not excessive.

These services are offered not only by policy providers, but also by industry-specific insurance brokers, who serve as intermediaries between their clients and the companies who underwrite the policies. “Brokers can really help midsized and smaller businesses by providing some of the specialized services that a business that size generally can’t afford to have on staff,” Kulda says.

Consider TrueNorth Companies, a Cedar Rapids, Iowa–based insurance and financial strategies firm that represents clients in transportation, among other industries. TrueNorth, which has an office in Burnsville, helps motor carriers develop driver safety and rewards programs. Drivers are rewarded for driving safely and maintaining clean records; trucking-company owners benefit from significantly reduced premiums.

In addition, TrueNorth has a team of risk-management, claims-management, and loss-control professionals who focus specifically on transportation, construction, and nursing homes. In the case of the transportation industry, TrueNorth understands factors that influence and the language of trucking operations, such as fuel surcharges and driver hiring and training practices. They’ll recognize that if a long-haul trucking firm uses curtain-sided vehicles, the contents they carry are more likely to develop rust. “Most cargo policies exclude rust,” says Chad Suter, a producer for TrueNorth. “Someone like us, on the specialist side, is going to catch that. If you’re dealing with someone who isn’t a specialist in the industry, you’ll run into situations where there might be gaps in the coverage.”