Must Haves
Clients' risk management departments can be sticklers for insurance.
Do your customers care what kind of insurance you have? If
they're smart, they do. If they have risk management
departments, they may even have specific requirements you must meet
to sell to them.
Typically, risk managers insist on certain types and levels of
insurance along with contingency plans for meeting commitments if
things go wrong, says Valerie Walters, director of global risk
management for Ciena, a fiber optic materials manufacturer in
Linthicum, Maryland. "I have to be the corporate pessimist, to
look at the worst-case scenario and protect my organization,"
she says.
Depending on your product or service, a customer may ask for
evidence of general, product and professional liability (errors and
omissions) insurance. If you have access to confidential
information, they may ask for intellectual property insurance to
cover damages if that information is stolen or used
inappropriately. You may be asked for a certificate of insurance or
other evidence of financial capacity, such as a letter of credit or
a bond, to demonstrate ability to cover a loss.
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Risk managers may also ask for proof of financial stability and
viability. You need to show them you've considered your own
worst-case scenarios and know how you will meet their needs even if
you have problems with your own facility or suppliers.
Walters says it's a good idea to ask companies early in the
sales process for details on their risk management requirements so
you can address those issues immediately, especially if it means
purchasing additional insurance. "We're not trying to make
it hard for small suppliers," says Walters, "we're
just trying to make it possible for both [customer and supplier] to
do business and do it well."
Jacquelyn Lynn is a freelance business writer in Orlando,
Florida.
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