Having the right insurance coverage is crucial in a world filled with uncertainties and unique challenges. Traditional insurance policies offer valuable protection for a wide range of businesses and the risks they face, but they may not adequately address the specific needs of businesses, organizations, or individuals engaged in high-risk activities or industries. Enter special risk insurance.
What is special risk insurance? Who needs it? Special risk insurance deviates from traditional insurance in several ways, all of which we plan to cover in our guide to identifying audiences for special risk insurance. If your business needs special risk insurance, know that it’s not because your business is bad at what it does or is inherently “dangerous” – it’s simply that traditional insurance isn’t always designed to match the unique needs of every business.
Let’s get into it.
First of All – What is Special Risk Insurance?
Special risk insurance is essentially non-traditional insurance or “unusual” insurance coverage, named since the entity or individual being insured may be more exposed to certain risks. The unusual risks that the insured is exposed to may be arising out of the dangerous nature of the individual’s profession or industry, or simply just that the industry is unique in what it offers.
Special risk insurance may exist in both commercial and personal spheres, although in the latter it tends to be referred to as “high risk insurance.” An individual may require high risk insurance if they have a poor driving record, have been convicted of a DUI, or their home is considered antique or is located rurally. High risk insurance is also called non-standard insurance.
Identifying the Need for Special Risk Insurance
In today’s dynamic world, various industries and activities carry inherent risks that go beyond the scope of traditional insurance coverage. It is crucial to identify the need for special risk insurance, as it provides tailored solutions to mitigate these specific risks effectively. Let’s explore how to identify the need for special risk insurance by examining high-risk industries, unique risk profiles, and conducting thorough risk assessments.
High-Risk Activities & Industries
Naturally, certain industries are inherently more prone to specific risks that required specialized insurance coverage than others. Think, for example, the entertainment industry and, narrower still, think of film productions, amusement parks, arcades, theatre, etc. Consider the myriad of risks this industry faces, from equipment damage and production delays to potential customer injuries or even severe vandalism and theft events. The sports industry is another example, considering professional athletes and sports teams are so prone to injuries and potential career-ending events.
For insuring individuals, special risk insurance may come into effect with high-risk activities. Extreme sports enthusiasts who regularly enjoy bungee jumping, skydiving, and rock climbing may have a heightened risk when compared to others. Individuals with high-risk occupations fall in the same boat, like firefighters, police officers, and offshore oil rig workers.
Unique Risk Profiles
Each industry, business, or individual has a distinct risk profile based on factors such as operations, demographics, and location. Understanding these profiles is essential in determining the need for special risk insurance. By analyzing potential risks and their potential impact, one can identify the appropriate coverage required to address those risks adequately.
For businesses, it is crucial to assess their operations and identify any activities or aspects that expose them to higher levels of risk. For example, a construction company specializing in high-rise buildings faces greater risks related to worker safety, accidents, and potential property damage. Special risk insurance can help address these business’ special needs.
Families and individuals may also have unique risk profiles. High net-worth individuals could require coverage for their particularly valuable assets, such as collectibles, luxury properties, or even their high-end vehicles. Families that are engaged in adventurous hobbies, like sailing and mountaineering may need coverage tailored to their own specific activities.
Examples of Target Audiences for Special Risk Insurance
Who needs special risk insurance? Well, special risk insurance can cater to the needs of multiple audiences – both entities and individuals alike. Let’s take two case study examples to highlight the importance of identifying the right targets and tailoring special risk insurance coverage to individuals’ requirements.
Case Study 1: Adventure Tourism Companies
Adventure tourism companies specialize in offering thrilling and high-risk activities such as whitewater rafting, mountaineering, and zip-lining. These companies face unique challenges and liabilities due to the nature of their operations. As such, having special risk insurance may be crucial to these companies.
For example, take a renowned adventure tourism company that offers guided rock-climbing expeditions. The company conducts thorough risk assessments to identify potential hazards and implements detailed safety protocols to minimize the risks that are involved. In addition, this company may also benefit from comprehensive special risk insurance, which would include coverage for potential accidents, evacuation costs, medical expenses, and liability claims that could arise from their operations.
Case Study 1: Film Production Businesses
Film production companies make beautiful products, and they often employ an extremely talented group of individuals to produce a gorgeous end goal that audiences can enjoy. However, they face a wide range of risks during the production process, and even during post-production. For example, they face the risk of equipment damage, injuries to cast and crew, production delays, and potential liability claims. Special risk insurance can be tailored to the film industry to protect businesses against their specific risks and ensure smooth operations.
For a small film company, special risk insurance would be a wise addition to a comprehensive risk management plan. Their coverage may include property coverage for expensive film equipment, coverage for interruption of filming, and liability claims arising from on-set accidents. In addition to numerous risk management strategies, this comprehensive coverage would allow the production company to focus on creating compelling projects while minimizing financial risks.
VaGo Insures
Vago is an MGA that provides the highest quality service. Vago sets itself apart by offering the fastest and most efficient service, including offering tailored special risk insurance to the individuals, professionals, and entities that need it.
Give us a call today or get a free quote to start on your own special risk insurance today. If you have any additional questions, we’re happy to give you the answers you need.
