3 secrets to pass successfully a risk inspection
By Dragos MindrutaManager
Risk Engineering Departament
As a general definition, risk inspection is an activity carried in insurance with the scope to prevent Insured material losses and/or financial by risks controlling ( reduction or cancellation thereof ) and Insurers reducing the value paid compensation in case of insured events.
The challenge to coordinate the risk inspections is very well described by an old Chinese proverb : « Hearing something 100 times is not as good as seeing it once”
My previous professional experience (in non-motor claims handling) it strengthened the conviction that any risk should be properly inspected and evaluated when an insurance policy is issuing.
Risk inspector activity include compulsory objective onsite visit. Following these visits result conclusions about the risk which will be take in consideration for underwriting process (property, engineering, bonds etc.).
In practice, risk inspection often make Insured feel that they are subjected to control or supervision, which generates, at least at the first side, a mistrust and discomfort.
Also, risk inspection could being perceived as a threat and associated with the idea of authorities inspection !
Also the practice show me that at the end, risk inspection gain Insured appreciation, making it actually benefits for his company.
Here are a few « secrets » which I would like to say all those (Insured/clients) who are preparing for an risk inspection.
- Risk Inspection = Precious consultancy for your company!
Take advantage of risk inspection as an opportunity that you receive a «general overhaul » of existing safety measures in the company.
Insurer’s risk inspector can be a very useful allied who can inform you about the most effective practices used by other company from the same industries and other activity sectors. Consequently, not only you we’ll get favorable insurance conditions but you can gain a competitive advantage by operations optimizing
- Prepare necessary documents in advance : operational, logistical and accounting.
Require to Insurer a list with all necessary documents, prepare them in advance to avoid « last minute « surprise and to optimise the time allocated at the risk inspection date.
Before the risk inspection, synthesized all existing safety measures and any previous incidents in the following areas: fire safety, measures of security and protection (bodyguards, video cameras etc), procedures for maintenance (buildings, equipment, facilities, etc.)
Any previous inspection reports can be very useful !
- After risk inspection performing : implementation of the measures established after risk inspection is absolutely essential!
In situation of insurance policy signing, established measures (as a recommendation or obligation) assuming and implementing from Insured within term, are ESSENTIAL.
Failure to comply go to insurance policy invalidation and no any indemnity received in case of insured’s event.
The next steps are followed in case of CertAsig risk inspection :
- Discussions with responsible objective operational or construction site management (for technological process and construction works understanding) , with personnel responsible for fire and work safety and objective protection ( very important to understand which are the safety and protection measures taken by the Insured ), with equipments inspection and maintenance personnel and not at the least with accounting staff (for clarification regarding on the sum insured , another an very important and often neglected aspect which can lead to a possible underinsurance and in case of claims can result an partial compensation received from the Insured .
It is recommended that these discussions with various specialists to take place prior the site visit, a meeting room (or in the offices of construction site), because a minimum of necessary information are necessary before objective visiting.
- On site visit covering all sectors, thus hazard or storage process areas identifying , including utilities instalations, fire protection and extinguishing systems, control rooms (alarm, security etc), dangerous materials storage area respective to identify the most important aspects of securing business continuity.
Last but not least, taking photos (only after permission is obtained from Insured management) is also very important for the relevance of positive factors, but also for the negative aspects, the last should be eliminated or corrected.
- Final discussion for conclusions about the object, with the staff of the client, in order to establish recommendations / obligations which can lead to improve risk factors and / or adjustment of the value of insured amounts, a writing feedback will be delivered to the client soon after realizing risk inspection.
After all informations were systematized and all documents were obtained, finally, the risk inspector prepares a report that will be sent to underwriting colleagues and will be used to assess this risk and insurance policy offering to cover the risk.