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Recent Events
InterCEP Holds National Roundtable on Insurance and Corporate Preparedness
October 19, 2006 8:54 AM
October 2006 -- The International Center for Enterprise Preparedness held the National Roundtable on Insurance and Corporate Preparedness. The goal of the multi-stakeholder forum was to examine and clarify the connection between business preparedness efforts and benefits in insurance including premium pricing and terms. This Roundtable brought together insurance underwriters, a former state insurance commissioner, representatives from key insurance industry associations, researchers, and federal government officials.
InterCEP is working with insurance industry stakeholders and the larger business community to develop supporting policies and strategic communications that clarify the linkage between corporate preparedness and insurance benefits for the corporations that undertake them.
Preparedness efforts can be a win/win for both businesses and their insurance companies.
Businesses themselves benefit from preparedness efforts in avoiding or minimizing losses from emergencies when they occur. A business has two primary exposures. First it has an obligation to pay any deductable amount on any insurance policy it may carry. However,losses from emergencis can often far exceed any insurance coverage held by the business. Thus, the business must also be responsible for expenses that exceed insurance coverage amounts.
The insurance industry also benefits from preparedness. Insurance companies can minimize the payout on claims against policies to the extent that preparedness has resulted in either avoiding or minimizing the loss. Thus, insurance companies benefit from active engagement in the identification and communication of the value of preparedness for the general business community, especially for firms with significant property/casualty, business interruption and D&O risk exposures.
The Roundtable undertook to clarify the value of specific preparedness strategies and activities in the mitigation of business losses due to extreme events; to discuss how preparedness efforts can be more effectively acknowledged and factored into insurance underwriting processes (including capacity, policy terms, pricing, etc.); and, to explore potential strategies for how leading members of the insurance industry might jointly affirm and broadly communicate the importance of preparedness for business loss mitigation. Click here to access these proceedings.
In addtion, Roundtable Participants reviewed and commented the draft findings of InterCEP's white paper on acknowledging preparedness in insurance. Click here to access this draft.
This initiative to further advance business incentives for corporate preparedness has been funded by the Alfred P. Sloan Foundation.