Here are the five common insurance mistakes and how they affect the bottom line.
Recently I had an interesting conversation with a CEO about blind spots in business leadership. In particular, she was discussing the way businesses purchase and manage insurance. She said it was one of her blind spots which she eventually recognized the hard way. With that in mind, I called Dave Dias, a friend of mine from InsuranceThoughtLeadership.com, and asked him what were the most common mistakes CEOs made regarding insurance. Below, he explains the five biggest mistakes:
Delegating Decisions
If a CEO is disengaged at the time of policy placement or when a significant claim occurs, it will almost certainly cost the company money. Consider the example of one CEO who couldn’t have been more removed during a sensitive claim-settlement negotiation following a major fire loss. He wasn’t conversant on the issues and relied exclusively on his staff. By the time the CEO re-engaged and began asking pertinent questions, the most germane issues had already been negotiated and settled. The financial loss was in the tens of thousands of dollars. His absence was a big miss; the matter would have been mitigated more in his favor had the CEO been more engaged from day one.
Allowing Procedure To Trump Leadership
Overanalyzing an issue “by committee” delays critically-important decisions and costs the company money. One CEO was overly concerned about getting everyone’s buy-in for the implementation of a newly formed safety-compliance committee. Because of internal politics it took months to ultimately get the committee moving in the right direction. The long implementation cost the organization thousands because they weren’t in compliance when state authorities showed up for an unexpected inspection and faced fines as a result. The CEO could have easily avoided the liability by creating team accountability tied to specific goals and crisp timelines.
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