Like death and taxes, there is yet another thing that is certain in life — insurance costs will continue to rise. The trickle-down effect of the World Trade Center and Pentagon disasters will likely be seen in our 2002 insurance statements. Some experts have said it could take years to put a final price tag on the cost of the terrorist attacks.

But businesses and individuals won’t have to wait that long to see an increase in their rates. I’m not an insurance expert, but I can only assume that business owners will be paying for this deplorable criminal act for the foreseeable future.

But it isn’t just an act of terrorism that will send rates upward. It is the everyday acts of crime and overzealous plaintiffs who may have the biggest impact on what business owners pay to protect themselves and their employees.


I was talking with a contractor recently and the discussion turned to the new fleet of company service vans that he ordered. The order for over 50 vans (leased) was quite impressive, especially in light of what his company had been recently experiencing.

He talked about the problem of vehicle break-ins and tool thefts. Some of the areas that his company services are in “high-crime” neighborhoods. He gave an example of one service tech who was paid in cash — all $20s — which the tech said was obviously drug money.

He felt helpless as techs came back after filing police reports, citing the theft of expensive power tools and other equipment, which was likely traded for drug money. And with every police report, there came the specter of an increase in insurance premiums — just the cost of doing business, I guess.

This contractor was having deadbolt locks put on the doors of his vans — a deterrent but not necessarily a solution.

And it’s not just a matter of protecting property. After all, a cordless drill or Sawzall can be replaced. It is also a matter of protecting the employees themselves — for which there are no replacements.

This contractor said he didn’t have the luxury of sending two service techs on each call to a bad neighborhood because he wouldn’t make any money on the call — probably lose money, in fact.

So what should this contractor do? Should he raise the price of his service calls in a certain zip code? He might, but he could be in trouble with laws that prohibit profiling and discrimination. Could he simply refuse to send a worker into a high-crime area? Certainly, he is within his rights to send his people anywhere he likes.


There is another factor that drives business owners and their agents crazy — too many changes in insurance laws and too few checks and balances.

In a Dec. 2 issue of The Oklahoman, the owner of a Tulsa, OK, janitorial company talked about how a technicality saved his company a big increase in its insurance premium.

Richard Urich was billed an extra $8,560 in premiums from his commercial insurance carrier. He didn’t think that was fair, so he sent them a check for $1,758 instead.

“He was notified about this rate change in October, which was more than 90 days after the inception of his policy,” said Urich’s agent Kevin Allen, president of Consolidated Insurance Agency in Tulsa. “So the company couldn’t charge him higher premiums retroactive all the way back to January. I got a copy of the rule, faxed it over to the insurance company, and saved his account $6,000.”

Look around for ways to protect your assets. It could be as simple as a deadbolt lock, or more involved — like shopping around for the best deals and the best agents.

Hall is business management editor. He can be reached at 734-542-6214; 734-542-6215 (fax); (e-mail).

Publication date: 12/17/2001