Contributed by Jami Gold, managing director, mergers & acquisitions, commercial insurance, ME Wilson
In the world of business, risk is inevitable. But in my two decades of working with middle-market businesses, I’ve seen too many companies take unnecessary risks simply because they don’t fully understand their insurance coverage. The right insurance strategy isn’t just about buying a policy, it’s about making sure you have the right coverage for your needs, maximizing cost efficiencies and eliminating unnecessary exclusions that could hurt you when you need protection the most.
Another observation from my years of investment banking is how little attention is paid to the expense of insurance, as it is typically a top three-line item on the income statement. If you can reduce that expense, it goes straight to EBITDA which then increases the value of your business. There are unique ways to look at insurance expenses and take creative steps to decrease costs.
At ME Wilson, we’ve been helping businesses navigate these challenges for more than 100 years. As part of our M&A and commercial insurance practice, I work with private equity firms, family offices, independent sponsors and businesses, of all sizes, to ensure they are getting the most out of their insurance policies.
Here are three ways your business can strengthen its insurance strategy in 2025:
1. Know what’s in your policy and what is not
One of the biggest mistakes I see is companies assuming their current policies fully protect them. In reality, many policies contain hidden exclusions that can leave businesses exposed when they file a claim. A thorough policy review is essential to ensure you have the right coverage without unnecessary gaps.
At ME Wilson, we frequently review policies and uncover issues such as:
Essential coverage is missing: Some policies leave out crucial protections, which businesses often discover only when they file a claim.
Unnecessary exclusions: Insurers sometimes include broad exclusions that could be negotiated out of the policy.
Duplicate or redundant policies: Some companies are overinsured in certain areas, meaning they’re paying for unnecessary coverage.
A professional review of your policies can help you understand your current coverage, identify areas for improvement and, ultimately, ensure you’re neither over-insured nor under-protected.
2. Consider captive insurance for cost savings and control
For businesses that qualify, captive insurance can be a game changer. Captives allow companies to, essentially, act as their own insurance provider by pooling resources with other businesses. This strategy is particularly beneficial for companies with strong risk management practices and a history of low claims.
Captive insurance bundles key policies—such as workers’ compensation, auto insurance and general liability—allowing businesses to retain unused premiums rather than losing them to traditional insurers. If your business meets the criteria, this strategy can reduce long-term costs and provide greater control over claims management.
Determining eligibility for a captive insurance program is relatively simple. A policy review and a look back at past claims can quickly indicate whether your company is a suitable candidate. If your claims’ history is solid and you’re looking for ways to manage costs more effectively, captives are worth exploring.
3. Take advantage of economies of scale for multi-business insurance strategies
Today, many companies own multiple businesses, or properties, but they often insure them separately—missing out on a major opportunity for savings. By bundling insurance coverage across multiple entities, businesses can leverage economies of scale and negotiate better terms.
For example, if you own multiple hotels, you may not need to purchase separate windstorm coverage for each location. Instead, an umbrella policy could cover all properties at a lower total cost. The same principle applies to other industries where companies have multiple assets or operations.
By reviewing your overall insurance strategy, across all business entities, you can identify opportunities to consolidate coverage, remove redundancies and achieve significant cost savings.
The right insurance strategy isn’t just about protection, it’s about maximizing efficiency, minimizing costs and ensuring you’re covered when it matters most. Businesses that take a proactive approach to policy reviews and consider alternative strategies, like captives and leverage economies of scale, will be better positioned for financial resilience in 2025.
At ME Wilson, we’re committed to helping businesses navigate these complexities and find the best solutions for their unique needs. Whether you’re undergoing an M&A transaction, managing a portfolio of companies or simply looking to optimize your commercial insurance strategy, making informed decisions today can save you time, money and stress down the road.
Jami Gold brings has more than 20 years of corporate advisory experience, working with middle-market businesses across multiple sectors. Prior to joining the firm, she spent over a decade with M&A focused boutique investment banking firms and previously held positions with accounting firms Grant Thornton and Cherry, Bekaert & Holland. She started her career at The General Electric Company.
At ME Wilson, Gold cultivates relationships with businesses, of all types, in need of sound advice relating to their insurance and benefits stack and working with companies looking to complete an M&A or other corporate finance transactions. This includes policy review, diligence services and writing new policies to complete the M&A transaction. You can reach her at [email protected].
