May 17, 2016

How To Get The Best Insurance Coverage For A Growing Company

Posted in Advice on Insurance by Miller Friel

In today’s post, guest contributor Clarissa Cerda explains the steps that hyper-growth technology companies should take to make certain that they procure the best possible insurance.  Clarissa’s strategies for addressing the changing insurance needs of fast moving technology companies provide a road map for in-house counsel,  CFO’s, or anyone else tasked with procuring insurance for an organization.  She recommends establishing an internal core team that is smoothly integrated with a set of outside professionals who understand emerging regulatory or legal challenges faced by the company. 

In Clarissa’s opinion, step one is to find a great broker that you can trust, and that you feel will advocate on your behalf, with the company’s best interest in mind.  She also wants a broker who understands that policy language is critical, and that aggressive multi-year negotiations are the only way to improve coverage over time. 

Because the interpretation of policy language is purely a legal function, Clarissa also recommends utilizing an outside law firm.  Her recommendation is that corporations look for a law firm that is highly specialized in this area of law, and she specifically recommends a boutique insurance recovery law firm having a sole focus of insurance recovery law.   She doesn’t believe that this type of work should be left in the hands of generalists or in-house legal teams. 

These kinds of best practices for the procurement of insurance that Clarissa recommends here are rapidly becoming the norm. 

At Miller Friel, we have an exclusive focus on insurance recovery law, with decades of experience in this narrow but complicated area of law.  If you have any questions at all about coverage, or how we can help in the procurement of coverage, please give us a call.  We would be happy to help.

Below we have included a transcript of the video:

How To Get The Best Insurance Coverage For A Growing Company

It’s going to be up to each and every general counsel, the culture of their firm, and how they go about it. There is no right way and there is now wrong way.

The way that that I have found very useful over the years in my different positions as general counsel is, I look first to get a really good broker. A broker that I trust, a broker that I think is interested in the benefit of what benefits the company, and that helps me be aggressive in both getting the right premium for the coverage that we are getting, but also thinking outside of the box, and helping me convince the insurance companies that changes in their policies, or exclusions, should be part of the negotiation process.

That’s what I look for in the broker, and how to do that part of the process. In order to be able to negotiate those advantageous provisions that you would like to see there for when something happens that you didn’t expect, after all that why we buy insurance, you really need to have an insurance recovery specialist, someone in the law firm.

I like to look for someone who that’s all they do. A boutique firm for me is the better way to go about finding an insurance recovery specialist, because that’s all they do every day. Making sure that insurance recovery specialist is collaborative, able to fit in, play nice and work well with the brokers. Sometimes insurance recovery specialists, brokers feel they should be doing similar things, and I believe in having both.

I think the broker has a role to play, I think the insurance recovery specialist has a role to play. I think even the internal legal or finance department depending on where it is in your particular cooperation has a very important role to play.

One of the nice things of bringing Miller Friel on to your team to be a partner, and not just a one off partner but a long term partner is, they can help you with long term strategies on how to protect the company, how to insure for certain enterprise risk.

Sometimes where you want to get to is not something that you can achieve with a carrier in one year. And you need to develop the strategy of how to improve that coverage position year over year. With an insurance recovery specialist, they understand the way the industry goes, what they are likely to accept and what proofs you might have to offer in year one or year two to get to your end result in year three.

In a technology company, particularly a hyper growth company, your business model changes in the early days, month after month, every six months, it’s a continually evolving innovative journey with hyper growth, and tech companies, usually. Your risks change, your risks change because you are often innovating, and you’re adopting or implementing cutting edge technologies.

And you are skirting on the edges of new regulatory areas at the same time. So, trying to really understand what that risk might be, and how you insure for that risk is not something you can do with a generalist.

It’s not something you can do with a jack-of-all-trades that you might have in-house. It really is something that requires the added perspective of an insurance recovery specialist, and I am happy to say that Miller Friel is exactly that kind of insurance recovery specialist.

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