Petrogram - Summer 2009 - (Page 17)
Insurance ISSUES Seeking Certainty in an Uncertain World The right insurance partner can bring you peace of mind o say we are witnessing uncertain economic times is an understatement. The petroleum marketing industry is not immune to these growing concerns. Risk is present everywhere in our industry – in some ways at unprecedented levels – and it is not likely to subside any time soon. Donald Jones However, there are some risks we can control – the insurable risks. As marketers we should be concerned about who we choose to insure with, making this selection wisely during these uncertain times. As a business owner in today’s challenging economic environment, you need an insurance partner whose service extends beyond the usual, and whose programs can provide specialized coverage tailored for our industry. Peace of mind does not come without a price and without extra due diligence on your part in choosing an insurer. T • • What Do We Need in an Insurance Partner? Don’t compromise when looking for an insurance partner today. Ask these questions before making a buying decision: How is the insurer rated by the insurance industry’s top rating organizations, like A.M. Best Company® and the Ward Group®? Do the terminals you pull product from require a speciﬁc A.M. Best rating? An “A+” (superior) Best rating and a Ward’s 50® designation place an insurer among the most ﬁnancially secure in the industry. It’s good to know the A.M. Best rating of your insurance carrier in the event your terminal contract has speciﬁc requirements. How long has the company been in business? How long has it served our industry? Much can be said about an insurance company by how long it has been in business and by how much knowledge and experience its leadership has. Has it been a stable, reliable partner to the petroleum industry or has its interest followed the whims of management changes? • • • • How does the company represent itself to its customers? There is a lot of debate about how an insurance company can most eﬀectively represent itself – either through a network of independent agents or directly through its own representatives. A strong case can be made that there is greater consistency and value with companies that focus on speciﬁc industries and that develop specialized products and services delivered by ﬁeld, claims and loss-control representatives employed directly by the company. What is the company’s structure? Is it a mutual or a stock company? Well-run and well-capitalized insurance companies can be either mutual or stock companies. In contrast to stock companies, mutual companies do not cater to the investment expectations of shareholders nor do they create an atmosphere where executives could be distracted by the enticement of stock options. Because mutual companies are not required to report to shareholders on a quarterly basis, they are likely to be in a better position to entertain and implement longer-range initiatives for the beneﬁt of their policyholders. What do others say about the company? The most reliable testament to the worthiness of an insurance company comes from their policyholders. Also consider the recommendations of industry trade associations. Often trade associations go to extra lengths to assess the ability of insurers to meet the expectations of their members before deciding to recommend a company. What risk management programs does the company oﬀer to help make a positive inﬂuence on the loss side? Risk management programs designed speciﬁcally for the petroleum industry are unique. An action plan customized for your individual business can have a positive, long-term impact on insurance costs. There can be signiﬁcant diﬀerences depending on whether these services are outsourced or are delivered by direct employees of the insurance company. A Final Thought It is critical that you, as a successful petroleum marketer, carefully choose your insurance company. This decision should include a clear understanding of the insurer’s ﬁnancial strength and its perceived ability to fulﬁll its promises. Far too much uncertainty exists in today’s economy for you to do anything less. ❍ Petrogram | Summer 2009 | 17
Table of Contents for the Digital Edition of Petrogram - Summer 2009
Petrogram - Summer 2009
2009 Convention and Trade Show Information
What, Another Deadline?
Out & About the Industry
The Un-Comfort Zone with Robert Wilson
FDOT’s Attack on Business Damage
Crime Doesn’t Pay – Neither Should You
The HR Advisor
Meet New Member: WatchDog Calibration
Keep It Local
Index to Advertisers/ Advertisers.com
Petrogram - Summer 2009
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