By Richard Poling, LIBRIS Program Manager
Many bookstores today are facing substantial increases in property and casualty business insurance costs. While costs remained steady throughout the 1990s, in early 2000 this situation began a dramatic change.
The insurance industry began to raise rates and limit coverage in late 2000 as a result of rising claims costs and a lack of investment income. The terrorist attacks of September 11 contributed to a further rise in rates, as many insurers found themselves posting major losses for the year. Depending upon the amount of insurance competition in a given region, and the industry's perception of adequacy of rates, there have been reports in some areas of cost increases of up to 50 percent.
LIBRIS, being an insurance company owned by the ABA and its members, has been able to mitigate these cost increases to a great extent. Unlike other insurance companies, our pricing depends greatly on the performance of the bookstore insureds within the program, and is not dependent upon performance of investments. LIBRIS has seen a general rise in claims dollars over the last few years. However, while LIBRIS rates may rise slightly for some insureds, on an overall basis LIBRIS rates are now markedly lower than the competition in many parts of the country.
For instance, over the last year LIBRIS has seen a tremendous growth in the number of workers' compensation policies written. Several states, notably California, have state funds which in the past were overly competitive. Recent upward rate adjustments by state funds, and some insurance company withdrawals from California, have resulted in LIBRIS being the choice for workers' compensation in almost every case where booksellers have asked us for a quote.
Clearly, bookstores need to protect themselves in current market conditions. In general, we recommend the following practices:
1) You should begin the renewal process 90 days prior to the renewal date. Be prepared to provide the necessary data to rate your insurance. This includes anticipated annual revenue, changes in inventory and property values, and estimated payrolls/employee counts for the coming year.
Additional information such as past losses, security information on the building, training of employees, and financial information may be required if seeking quotes from other than your current carrier.
2) Make sure you get a quote from LIBRIS by calling 1-888-694-8585 with your renewal information. Or visit www.LIBRIS.org and complete the quote request form.
3) Instruct your broker to deliver the quote 30-45 days prior to renewal. Also, you can ask for quotes at different deductible levels or limits.
This will allow adequate time to address any issues. Insist on an early quote!
4) Ask your broker to identify all coverage changes. It is typical industry practice to only reveal what the insurer determines as "significant" coverage changes. Ask questions about any coverage changes you do not understand.
Editors Note: The insurance tips contained in this article were provided by the insurance professionals at LIBRIS (League of Independent Book Retailer Insurance Services). LIBRIS is an insurance program exclusively for independent booksellers and is sponsored by the ABA and owned by ABA members.
You are invited to contact LIBRIS at (888) 694-8585 or www.LIBRIS.org with any questions about your business property, liability, or workers' compensation insurance. The staff at LIBRIS will be happy to provide you with a free, no obligation, insurance quote, usually within one business day.