Web site cancels shop insurance

My company’s commercial insurance policies renewed each August in uneventful fashion—that is, until 2012. About 6 weeks before this year’s renewal, our insurance agent informed me our carrier had decided not to renew any of our policies, in spite of having no claims for more than 4 years. Even when reviewing our claims history, the several previously filed didn’t total much, so there wasn’t any reason to consider us particularly risky. Or was there?

According to our carrier, we were suddenly a high-risk client. Without much warning, procuring new insurance policies suddenly went to the top of my priority list and became yet another time-consuming, non-revenue-generating activity.

After discussing the matter, the agent informed me that some carriers are fleeing industrial accounts. Apparently, they envision plane crashes, oil well explosions and hurricanes devastating industrial facilities and aren’t willing to accept the risk anymore.

After asking why our company was suddenly considered high risk, I discovered the primary culprit—our Web site. “Well, they see on your Web site that you serve the aviation, energy, transportation and medical sectors,” the agent said. My immediate response was, “What does that have to do with anything?” He informed me that by simply listing and promoting services to these industries, the carrier automatically assumed this meant the manufacturing of critical components that could expose the carrier to tremendous risk involving a product failure.

I wanted to know my next course of action and the agent assured me that other carriers specialize in such policies. This began the process of responding to many requests for paperwork involving company details, information about manufacturing processes and the markets we serve. While it’s understandable an insurance carrier looking to insure a manufacturer for the first time would want so much information, it was still very time-consuming and even frustrating.