Supermarket 7/01 reprint

The best way for a smaller retailer to save on
insurance costs is to form an alliance with a strong
insurance partner that specializes in the grocery
store industry. It may cost more at first, but it will
save a lot of money in the long run. First, the retailer gets the right coverage. “Find someone who
understands the industry,” says Jim Level, vice president of Level’s Food Center in Fort Worth, Texas. “I
have different inventory levels and cash needs at
different times, so I require different limits, which
most carriers don’t offer.”
An experienced partner also provides added
value in the form of vital loss-prevention programs
like those of the larger chains, only customized for
smaller enterprises. The partner that specializes
also handles claims more effectively than a general
insurer. For example, if a food poisoning claim is
mishandled, loss of reputation and customers can
be fatal. “Any carrier can do loss control visits to
your store,” says John C. Flickinger, manager for
Redner’s Warehouse Markets in Reading, Pa. “But
only one that specializes in grocery stores will be
expert in food safety and sanitation.”
A strong partner lowers a retailer’s costs both
directly and indirectly. This allows smaller retailers
to concentrate on differentiating themselves.
Investing in activities that make them the best in
customer service or in diverse merchandise makes a
lot more sense.
Do’s and Don’ts of Choosing
an Insurance Partner
Do:
• Compare apples to apples. Some insurers
provide nothing but a policy. Others offer
resources like safety committee kits, free consulting, training videos and materials, OSHA
and food handling guidance, etc.
• Purchase from an experienced carrier that
understands the grocery business. A
mishandled claim may mean paying many
times over.
• Check the insurer’s AM Best rating to
ascertain financial stability.
• Take the carrier on a test drive. Ask the
agent to walk through the store and make
suggestions to see if he knows anything
about grocery stores.
• Choose a strong insurance partner now.
Rates are going up and choices will soon be
limited.
Don’t:
• Use price as the only determining factor.
• Change companies every year. Improving
loss experience happens over the long term.
• Expect a quick fix. Lasting results require
behavioral changes.
A Partner, Not a Policy
Buying insurance goes beyond choosing a
policy. It means selecting a partner that can help
meet business goals. “When choosing a carrier, get
to know their loss prevention and claims staff, not
just the underwriter,” recommends Jim Armstrong,
director of risk management for Tidyman’s of
Spokane, Wash. Cutting corners by choosing a
low-cost carrier is short-term thinking because it will
mean paying extra money in claims and rising premiums. In a tightly competitive market, it’s better to
allocate dollars to marketing than to spend them on
loss and accident recovery. It’s smarter to invest in
a strong insurance partner and reap the benefits of
improved loss experience for years to come.
For the first time in 13 years, insurance rates are
going up. Soon grocers will be penalized for high
losses with higher premiums, and carrier options
will become increasingly limited. But retailers can
gain better control over the cost of their insurance.
They can find a strong partner who will help them
implement proactive risk management programs to
compete with giants like Wal-Mart.
David G. Edison is chief insurance
officer for Grocers Insurance,
headquartered in Portland, Oregon.
For further information, call (800)
777-3602, or visit the company’s Web
site at www.grocins.com.
Solutions for your Market™
Telephone: (800) 777-3602 • www.grocins.com