How to Buy Insurance for Your Nonprofit – Step 8: Negotiate

After engaging an agent and applying for coverage, you will start the review and negotiation processes.

I hesitated about putting ‘negotiate’ before ‘review’. The two really go hand in hand, time-wise. You will review and discuss with your advisers and board members and intermittently dial in the numbers, policy provisions, and other details through negotiating with your agent.

Buying Process Step 8

What I Don’t Mean by Negotiation

While insurance agents have some control over price points and premium rates, your agent does not actually set the price. If your agent quoted you with various carriers, then you should have a good picture of the cost, within a few percentage points.

There might be some leeway with the premium, and that’s not something to take lightly.

For our purposes, negotiation does not mean haggling.  There might be some wiggle room after an underwriter has given a proposal, but make sure to focus on the value and protection that a potential policy provides to your organization.

What I Do Mean by Negotiation

Negotiation with your agent (again, for our purposes) is about setting service, expectations confirming coverage provisions.

  • What level and standard of service will be provided?
  • Does the proposal represent the most complete coverage as requested?
  • Are there any endorsements (policy additions and subtractions) that are relevant to your organization?
  • Is the insurance company proposed financially stable?
  • How has the agent’s experience been with the carrier’s claims handling?
  • What key coverages are NOT included but are advised?
  • And finally, the cost issue is important and should be addressed, especially if you’ve seen wild swings from provider to provider and agent to agent.

 

What Is the Goal?

The main goal is for you to have a proposal that is what you need at a reasonable cost.

It”s also a good idea to work out a potential meeting between your agents and board. This meeting happens way too seldom.  Too many nonprofit board leaders know too little about the elements that go into the insurance buying process. And too many consider it an annoying expense.

There is a huge opportunity for the executive director, other executives, and the board to drill down into risk management issues. In the midst of development, program coordination, and the other forward facing issues that take the bulk of a nonprofit’s time, an occasional focus on protecting the vision and mission of the organization is vital.

Our next step will be around your review process. As I mentioned above, there will be much overlap in the review and negotiation steps.  You will want to make sure you have a good idea about what risks you are transferring (via an insurance policy) and what risks you are deciding to self-insure.

As always, please drop some questions below if you have any. Thanks! 

 

 

 

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