Selecting the ideal liability limit is more of an art than a science. The simplest response to questions regarding the selection of an appropriate limit is the old adage, “Purchase the largest amount that either the insurance market will offer or you can afford.”
However, this expression doesn’t account for varying market cycles, differences between businesses, and risk appetite. No two companies are the same. Even companies of the same size and industry are unique.
RCM&D approaches limits benchmarking from a broad spectrum of perspectives, including:
- Peer Purchasing Behaviors
- Carrier information
- RIMS Benchmarking Data
- Existing client base
- Analysis of Regulatory Filings
- Litigation Trends
- Your Organization’s Assets and Measurements
- Corporate and Pension
- Revenues
- Shareholder Base
- Share Price History
- Employee Counts
- Distribution
The final decision about your appropriate limits may boil down to selecting the largest amount of limits the firm can afford. RCM&D can help you reach a decision through a benchmarking process that provides multiple perspectives specific to your organization. Contact our Professional Services Practice to learn more about how peer purchasing behaviors, trends and benchmarking can help you find the ideal liability limit for your company.