Get an Insurance Checkup
Your insurance needs aren't the same as your local auto mechanic's; they are different than those of a plumber. Your insurance needs aren't even the same as those of the other drilling contractor in town. You need coverage that protects your firm specifically. And you need the services of professionals who understand that and can provide coverage tailored to the unique needs of drilling contractors and to your company in particular.
Unless you truly understand all the wrinkles of the insurance industry as it pertains to drilling, you can run into serious - even terminal- problems. Just as a homeowner shouldn't attempt his own drilling work, drilling contractors should rely on professionals for the critically important issue of insurance. Having a good broker and insurance carrier means you can focus your energies on drilling.
Your Insurance BrokerEverything starts with your insurance broker. That's the person who's going to be the point person for all your needs - from analyzing your insurance requirements and selecting coverages and carriers to helping you implement valuable loss control measures and facilitate fast and fair claims services.
Consider your relationship with your broker a partnership - that's what it needs to be. You want your broker right there as an active participant in what you're doing. A good agent is keeping an eye out for you. Make sure your agent knows exactly what you're doing at all times because you need to have all the appropriate coverages. A prime example: Send your broker contracts and specifications. He should be up on all the latest crafty contract language that can impact your exposure. Claims are getting bigger; you need to know you have everything covered or your business can be destroyed.
A good insurance broker truly is a business partner. As such, you want to be able to depend on that partner's professionalism and experience to look out for your best interests in a timely and efficient manner. You need a broker that understands your unique circumstances. Similarly, it's important that your broker is experienced in dealing with highly rated insurance carriers that themselves have made the commitment to understand and serve the needs of drilling contractors.
When choosing among brokers, ask them to do a risk management analysis of your firm and ask them to make recommendations on how to best protect it. Put them through their paces; find out what they can (and will) do for you. You want an agent that is going to be there when needed. You need to know you're going to get prompt and efficient service. When there's a claim, you need answers and you need them fast.
Carrier SelectionThere really aren't that many out there. And while prospective carriers all might be similar in many, if not most ways, the differences, although subtle, can have an enormous impact when it comes to protecting your business. They all will offer the basics - workers' compensation, general liability, property, fleet, errors and omissions, umbrella, etc. They also will offer specialty coverages and surety bond services. But they do it in their own particular way with certain exclusions, which may or may not be best for you. You need the appropriate coverages, policy limits and deductibles.
Your broker should be on top of all the little nuances to help you with that decision, but you need to be aware of some of the basics. Much of the information you need to choose between carriers is very straightforward. The coverages offered, the premiums to be paid and the ratings of the carriers are things that can be seen on a piece of paper and readily compared.
There are other criteria that take a little more digging to get to - this is where your broker comes in again. You need to take a good, hard look at the reputation of the carrier. And not just the company's reputation in general, but also its reputation and evidence of commitment in the drilling contracting arena. Is the carrier financially stable? Has it jumped in and out of the drilling business, depending on the market climate? Has it become stronger or weaker in the drilling marketplace? Carriers sometimes get tired of the book of business and their interest in drilling contractors wanes. They change their pricing and no longer are competitive. What you want is a company that's in it for the long haul.
Customer ServicePerhaps the biggest difference-maker is customer service - a concept of which bottom line-eyeing contractors are keenly aware. After you and your broker have narrowed down the options, you need to examine how the carriers will work with you and your broker in areas such as risk management, loss control and claims service. These things have tremendous impact on your firm's reputation and, therefore, its bottom line. Make sure you're getting all the help you can in these areas.
Your agent and carrier should be able to conduct a safety audits at your shop and work sites and help you implement a solid safety program. Even if you know all the OSHA rules inside-out, they should be able to provide some extra tips and advice. You don't want higher insurance rates and you don't want to lose valuable employees.
Another area where your agent and carrier can offer consulting and coverage is in employment practices insurance. Hiring and firing certainly has become trickier of late. Every day we hear another horror story about employment-related lawsuits.
When you do have a claim - of any kind - against you, you need your interests protected. This starts with a fast response from your agent and carrier. You need a thorough investigation, accurate reports and follow-up. Your insurance partners can assist with claims review, fraud control and even legal services, if neccessary.
You want a proactive insurance team that's going to investigate claims, is enthusiastic about return-to-work, and will help with loss control and risk management. That keeps modification rates and costs down. It's a team effort between you the driller, the agent and the insurance carrier, and you can make a powerful team.
It's a Two-way StreetHave I stressed enough how your agent and carrier are your business partners, and the importance of the team approach? As part of the team, you need to be a good customer in order to maximize the relationship. It's not just you selecting a broker and carrier; the broker and carrier are selecting you as well.
Carriers look at a contractor's experience in drilling and as a business operator. Make yourself look as sophisticated and as knowledgeable as possible. You can demonstrate this with a proactive commitment to safety, accurate record-keeping, timely claims reporting and aggressive accident investigating. Perhaps the biggest key is communication. Be up front and give your broker and carrier the information they need in order to help you make sound business decisions.
There are good brokers and bad brokers. If you just go out and shop six guys every year to get the cheapest price, you're flirting with disaster. Good brokers avoid wasting time on price shoppers - they don't need practice quoting. Show a commitment from your end. Go into the relationship like you would with an attorney or a CPA. Say, "You're going to be my guy. I'm depending on you for coverage and risk management advice. Take care of me." Once the relationship is established, everyone is more comfortable. Do all you can to hold up your end, and your insurance partners will battle for you when you need it.
The investment of time, effort and financial resources needed to sustain a professional drilling contracting firm is massive. And it's not just about the business enterprise and keeping your employees safe - it's also about you and your family's security. Give all of that the protection it so richly deserves.