Navigating the landscape of liability insurance for guides and other outdoor activities is challenging. The number of insurers and specialty insurance programs for this sector are fewer and the appetite of insurance companies for the various activities are quite often limited. Main street insurance agents and brokers may not know much about the marketplace and fewer still have much understanding of the operations and how to manage the risks. Working with insurance brokers that understand the outdoor recreational industry and are outdoor enthusiasts themselves will better serve guides looking for insurance.
INSURANCE MARKET CONDITION
The insurance industry goes through cycles, and it is currently in what is called a “hard market.” This simply means the rates are increasing and underwriting is becoming tighter. There are several factors influencing this cycle such as:
1) inflation – increase in property values resulting in increased claim payments,
2) natural disasters throughout the country and the world such as floods, hurricanes, wildfires, and “river storms” in the West Coast are increasingly common and more devastating which leads to an increase in reinsurance cost (insurance for insurers),
3) poor investment returns – to name a few.
All these factors, and more, are causing insurance underwriters to be more cautious and selective on who they insure. This also leads to coverage restrictions or more exclusions or both.
WHAT CAN YOU DO?
Insurance underwriters are looking for well run, well managed businesses to whom to offer the most competitive rates. They look for businesses who actively manage their risks and train their staff to do the same. They look for owners and managers who are safety conscious, exercise loss control measures and implement risk transfer whenever possible. Do you have safety and first aid training? Do you have policies and procedures in place to mitigate potential risks? Do you have your clients sign waivers (hold harmless) forms?
Protecting your insurability and competitive insurance rates now and in the future is a function of the risk management culture you create. Don’t exchange “dollar for dollar” with insurance companies because you will ultimately be at a disadvantage. What does this mean? Treat insurance as a risk management tool to avoid catastrophic financial loss to you and your business. Insurance should be for the “bigger” claims, not the “little” ones. Your agent can help you design your policy to achieve this balance.
ABOUT CROSS CURRENT
Cross Current Insurance Group was created to help protect the outdoor enthusiasts through insurance and risk management. Think of us as “a guide’s guide to insurance.” We learned that the outdoor and recreation sector is highly underserved by the insurance industry. We applied our four decades of insurance knowledge to help guides and related outdoor adventure businesses by developing innovative insurance programs and improving representation to the insurance marketplace. All our staff and ambassadors have a passion for the outdoors. We give part of our profits to help protect what matters to all of us. As we like to say at Cross Current Insurance Group, “Protect your passion.”
MWGO is proud to partner with Cross Current Insurance Group to provide twice annual insurance workshops for MWGO members. Look for more information about these workshops in our monthly eNews!