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Corporate Policyholders: Maximize Insurance Assets by Utilizing Claims Simulations

Business “disasters” can take many forms: a product recall, a product liability claim, a cyberattack, a phishing scam, a pandemic that shuts down your business, a professional negligence claim, or a shareholder lawsuit. Preparing for these risks often involves more than simply purchasing insurance. Increasingly, companies are turning to insurance claims simulations to better understand how their coverage may respond to different real-world scenarios and to ensure they are adequately protected before a crisis occurs.

insurance claims simulations

The Importance of Preparing Insurance Coverage Before a Claim

The heavy lifting to ensure your company has the right type and amount of insurance to effectuate the intended transfer of risk of loss from the company to its insurers must happen before a potential claim arises.

Using AI Platforms to Evaluate Insurance Risk

Are you and your insurance broker doing everything possible to make sure you have adequate insurance? One tool every company should ensure their broker is using is an AI platform that allows brokers to model hundreds of different risk scenarios simultaneously to help companies understand their exposure under various conditions and prepare appropriate coverage strategies.

How AI Platforms Support Insurance Strategy

At their most basic level, these AI platforms can perform low-level tasks like comparing premium quotes. But the platforms can perform much more sophisticated chores, such as:
  • Simulating real-world outcomes based on large datasets, including taking into account historical claims, current market and litigation trends, and external risk factors like weather patterns and virtual supply chain failures.
  • Customizing policy terms to a company’s unique risk profile by recommending specific endorsements or coverage limits, thereby ensuring a company is neither underinsured nor overpaying for insurance it does not need.
  • Identifying potential gaps in coverage by comparing policy language against a client’s actual risk exposures and industry-specific hazards.

Why Companies Must Be Active Participants in Insurance Procurement

Having an insurance broker who utilizes an AI platform to help companies maximize their insurance coverage is not enough. Companies must be active participants in the procurement process. Companies know their claims history and risk profile better than their brokers. As such, companies should work together with their brokers in utilizing the AI platform and ensuring their broker is utilizing the best assumptions.

Get More Information

To discuss your specific insurance coverage issue, please contact Jacob M. Mihm. You can also learn more about him by visiting his LinkedIn profile.

 Disclaimer: This article is provided for informational purposes only and does not constitute legal advice. Polales Horton & Leonardi LLP is experienced in handling complex insurance coverage matters on behalf of policyholders across the United States.