Position Your Company for a Successful New Year:
Tips for Toy Companies on Getting the Best Value for Your Insurance
Dollar
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Top Insurance Tips for
2010
- Provide good forecasts
for expected sales and any shipments overseas to get the best insurance
rates possible.
- Consider deductible or
self-insured retentions as options to first dollar coverage as a way to
increase cash flow and help manage claims.
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Before breaking for the winter holidays, managers of toy companies of
all sizes find it important to reflect on the year’s goals,
successes, missteps and challenges and to look ahead to the coming
year’s fiscal goals and objectives. One area of particular
interest for risk managers, financial officers and chief executives is
corporate insurance policies. Insurance costs are typically one of
largest line items on a balance sheet and should therefore be looked at
closely.
Experts predict little fluctuation between the 2009 and 2010
insurance marketplace. A continued softening of the market could lead to
a downward trend that extends from the first into the second half of the
year. This softening will be a result of increased capacity (i.e.
new carriers writing business), a reduction in reinsurance costs and
more competition amongst carriers trying to gain market share.
“For insurance buyers, this is the perfect time to reevaluate
your insurance program and make sure that it is still suitable as things
may have changed over the past year such as employee headcount,
revenue/cash flow, vendor changes, etc.,” predicts Benjamin
Thrush, vice president of business development at HUB International
Northeast. “Now is a great time to reduce your risk exposures by
expanding your coverage options.”
Mr. Thrush suggests that one major item to consider is Product
Liability Insurance. For toy retailers and distributors who operate
internationally, this policy covers claims made on products sold in the
U.S. but manufactured in another country such as China where there would
traditionally be no legal recourse against the manufacturer.
Another area to consider is the claims settlement clause. For
example, when a claim is settled overseas you can negotiate payments in
Euros instead of U.S. dollars. Taking this precaution will ensure that
you receive compensation that will not be devalued over the time it took
for your claim to process.
TIA members who have questions about product liability or claims
settlement coverage, or who would like a free analysis of their current
insurance policies, may contact Mr.
Thrush at 1-800-706-3023. Additional information on HUB's
business insurance offerings to the toy industry is available online at
the newly updated www.hub-tia.com.
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