Our comprehensive insurance program evaluation begins with a thorough risk identification and measurement exercise to determine the types of risks and the magnitude of the potential loss presented by these risks. We will then review in detail each insurance policy currently purchased by the organization to evaluate the breadth of coverage provided, the premium charged for the policy, the limits provided by the policy, and the deductible or self-insured retentions contained in each policy. We will evaluate the marketing process utilized by the broker to arrange these coverages.
Recommendations will then be prepared and presented to correct any deficiencies identified, including the purchase of additional insurance policies if appropriate.
Preparation of Insurance Specifications
We will prepare insurance specifications for a single line of insurance or for the entire insurance program. This type of project would be initiated with a thorough risk identification and measurement process to assure the specifications address the organization’s risks. The specification package would contain complete underwriting information for the insurers that will be responding the specifications. An intermediate step before releasing the specifications may be the selection of brokers or agents who would be charged with the responsibility of delivering the specifications to the insurance markets and collecting quotations that would respond to the specifications. Alternatively, the client may have already decided which broker or agent will process the specifications.
We will manage the bid process from start to finish, evaluate the bids received and provide recommendations as to which proposal should be selected. The final step will be to review the insurance policies provided to assure they comply fully with the specifications and any enhancements promised by the successful insurer.
Insurance Program Review for Bond Indenture Requirements
Many healthcare organizations have requirements in their bond indentures, or financing agreements, that require a periodic review of the organization’s insurance program to assure the program complies with the insurance requirements contained in the bond language. Some of these requirements demand that the review be conducted by an independent consultant in order to avoid any potential conflict of interest for the agent or broker that was responsible for putting the program together.
Our service would be initiated with a comprehensive risk identification and measurement process, followed by discussion with management, and then a thorough review of all the property and liability insurance policies. Our report will confirm compliance with bond requirements, if appropriate. If the insurance program is not in compliance, we will provide a complete explanation of the deficiencies and recommendations for correcting the deficiencies.
The completed report will provide an up to date schedule of current insurance policies.
Merger and Acquisition Due Diligence
As organizations merge or are acquired by other organizations, an important element of the due diligence process is the potential liabilities that may come to the new organization from the activities of the acquired or merged organizations. These liabilities are not simply the known financial liabilities, but the unknown liabilities that may be present as a result of activities that were not insured, or activities that were underinsured.
Our project would include a comprehensive risk identification and measurement process followed by a thorough review of the existing insurance policies. We would identify the exposures to loss that have not been insured and those exposures where the limits of insurance were not sufficient. We will then provide recommendations to correct the uninsured or underinsured exposures and risks. These recommendations may include the use of alternative risk financing techniques.