Google is the leader in search, there’s no argument about it. And Google is the leader in pay-per-click and advertising via it’s AdSense and AdWords sister programs, too. To keep the programs running optimally, Google wants legitimate clicks from people looking for answers and products to solve their problems. Advertisers pay for these clicks and AdSense publishers are paid a commission when someone clicks an ad on their site. Because of this, Google gets rather upset when their terms of service aren’t followed.

Anyone who’s serious about Internet marketing and who wants to make some of the great income possible with AdSense, needs to understand what Google expects of you. If you break the rules, you can have your ability to publish AdSense ads pulled and you can be banned for life. That’s not good.

If you’re into Internet marketing, it’s important to remember these things before even applying as an AdSense publisher:

Google says you cannot: “…directly or indirectly generate queries, Referral Events, or impressions of or clicks on any Ad, Link, Search Result, or Referral Button through any automated, deceptive, fraudulent or other invalid means…”

What it means: Don’t encourage clicks. If you put any page with AdSense into an automatic system, you’re in jeopardy. For example, never put a page with AdSense into a traffic exchange, whether it’s manual or automatic. Google doesn’t like it. Don’t use robots to click the ads, either. The IP address of clickers is recorded and Google can pick up suspicious activity in a heartbeat.

Google says you cannot: “…edit, modify, filter or change the order of the information contained in any Ad, Link, Ad Unit, Search Result, or Referral Button, or remove, obscure or minimize any Ad, Link, Ad Unit, Search Result, or Referral Button in any way…”

What it means: Never try to change the results in the AdSense template, nor try to hide them. Here’s an example: You know how to program PHP and devise a script that allows the ads only to be shown when they aren’t in direct competition with you. Bad idea! Block ads you don’t want in the “Competitive Ad Filter” at the AdSense site, instead.

Google says you cannot: “…frame, minimize, remove or otherwise inhibit the full and complete display of any Web page accessed by an end user after clicking on any part of an Ad (“Advertiser Page”), any Search Results Page, or any Referral Page…”

What it means: Don’t try to change anything about an advertiser’s page (what’s shown immediately when someone clicks on an ad). Plus, the pages had better be normal size, shape, and color, too. You can’t manipulate these results in any manner.

Google says you cannot: “…redirect an end user away from any Advertiser Page, Search Results Page, or Referral Page; provide a version of the Advertiser Page, Search Results Page, or Referral Page that is different from the page an end user would access by going directly to the Advertiser Page, Search Results Page, or Referral Page…”

What it means: You can’t get involved in the click-through. Don’t try to stick a page in that sells your product first, for example. Clickers must go directly to the advertiser’s site without interference.

Google says you cannot: “…act in any way that violates any Program Policies posted on the Google Web Site…”

What it means: Don’t mess around. Be sure that you read the terms of service thoroughly and that you follow the rules. If you don’t, your Internet marketing business will suffer.

Google AdSense rocks because it’s a no-brainer, simple way to make money with your blog. Put it above every post. Put it in your sidebar. Add a search bar to your site, and refer others. If you do all of those things, you’ll be using your AdSense account to its fullest advantage. In the Internet marketing world, AdSense can be a welcome partner regardless of your niche.

Affiliate marketers start out sifting through the many affiliate programs and direct merchants to join in a bid to earn money online.

This can be quite a daunting task for the new affiliate. The questions arise, ‘should I join affiliate programs?’, or ‘should I join direct merchants?’, or ‘should I do both?’.

Joining affiliate programs can be regarded as a good move in that you’re able to join with the one program but join bulk merchants, promote products and merchants, and receive one big payment each month, if you’ve put in the hard work for it.

Joining direct merchants can be time consuming. First of all, you have to search which merchants you would like to join and then complete individual applications to these merchants. However, many direct merchants offer lifetime or recurring cookies, as well as commissions for sub affiliates, and 2nd tier commission payments. These affiliate commission structures can come in quite handy for an affiliate marketer.

Affiliate lifetime commissions, or residual commissions, as they are also known, are usually received by subscriptions and memberships where you can rely on affiliate commissions being received as long as the member is subscribed to the particular service. Why earn affiliate commission from one customer for one products, when you can earn affiliate commission for a lifetime? There’s no comparison.

Other affiliate merchants offer lifetime cookies which never expire. This means if a prospective customer visits your site, clicks on your link, and buys something in 2 years time, you still get paid for it. Many cookies through affiliate programs expire after 30 days, some even less, so affiliate tracking and cookie expiration is definitely something an affiliate marketer should research before signing up for an affiliate program.

There has been much speculation and discussion concerning the future threat of terrorist attacks with weapons of mass destruction against Israel, Western Europe, and the United States. If terrorist groups have weapons of mass destruction we must take an objective look at all the potential targets of opportunity for an attack and the availability of these weapons.

“Terrorists have not only long memories, they have infinite patience. They certainly learn from their mistakes.” –Edith E. Flynn, professor of criminal justice at Northeastern University.

The conventional news media and our political leadership have been less than forthcoming on this issue, either to avoid a public panic or at government direction. Nevertheless, this question still must be asked. The 9/11 terrorist attacks on Washington and New York was an operation that took years of planning and was certainly not a one-time strike on America. Although Washington’s massive response in Afghanistan and Iraq, as well as against terrorist cells around the world, does appear to have caught our enemies off guard, this reprieve will not last forever. Eventually they will react with a massive counter attack designed for maximum public effect, U.S. humiliation, and economic destruction.

To determine the target, we must first explore the probable goals of the anti-Western players in this conflict. While they can not hope to destroy the United States as the world’s only remaining superpower, they are obviously interested in replacing all the existing “moderate” Arab governments with fundamentalist, Islamic regimes. Their long-term objective is to topple the existing governments of Egypt, Saudi Arabia, Pakistan, the Arab Emirates, Kuwait, and Turkey, and replace them with fundamentalist Islamic governments that are anti-American and will cooperate in destroying the nation of Israel.

Neither Israel Nor Most of Europe Is A Probable Target

The Islamic fundamentalists goal is to unite the Moslem world. Therefore, it is unlikely that they would pursue a nuclear, biological, or chemical attack against Israel. There was some concern that Saddam would launch isolated attacks against Israel when invaded by the U.S., but this did not happen. Our intelligence turned out to be completely wrong about his military capabilities. Still, I believe there is little danger of a mass, unilateral attack against Israel by Arab terrorists for the following reasons:

A weapon of mass destruction attack against Israel, when they obtain the capability, would by its very nature kill many hundreds of thousands of Palestinians. This would hurt the support for their cause from other Arab nations and peoples. Moreover, an attack here would probably destroy or render unusable the Moslem holy sites in Jerusalem and on the West Bank. Killing a large number of the Jews in Israel, along with the Palestinians, is too high of a price to be paid for the immediate destruction of Israel. Plus, an attack against Israel would be counter productive due to Israel’s nuclear arsenal and stated intentions. Every Arab terrorist leader knows that if weapons of mass destruction are used against Israel and they suffer a massive loss of lives or are even defeated, then no nation in the Middle East will avoid a final Doomsday attack with total annihilation and ultimate destruction by nuclear weapons.

The opportune terrorist target certainly is not Western Europe, with the exception of the United Kingdom and the other few remaining European supporters of American foreign policy. Most of Europe is on the sidelines in the current conflict and due to oil or geo-political considerations often side with the Arab states regarding America’s Middle East policies. Therefore, with the exception of London, I do not feel Europe is at risk of a terrorist weapon of mass destruction attack.

Washington DC Is Not the Prime Target

The primary target of opportunity is not Washington D.C. either. Although home to many military installations and commands, national intelligence, and hundreds of thousands of politicians, lobbyists and bureaucrats, America’s military might and capabilities are far too widespread around the world for an attack on Washington to cripple our military. If they had the means to hit two targets in the U.S. at the same time with weapons of mass destruction, Washington could be the shared target, but this is unlikely.

The military power of the United States’ armed forces is such that terrorists can have little impact on our capability to wage war and retribution in the event of an attack. Yes, they could target Washington. Yes, they could destroy maybe an aircraft carrier task force. And yes, they could conceivably deliver a short-term tactical defeat against us if we proceed to occupy more nations in the Middle East, but they cannot hope to defeat us as a military power. As the Japanese learned with their attack on Pearl Harbor, and as bin Laden found out after 9/11, it is not a wise course of action to provoke the United States when we can target the enemy.

It is time to discuss a very taboo subject in the establishment press.

What is the next probable target of Osama bin Laden or other Islamic militant terrorists here in the United States? We have heard over and over again that they targeted the World Trade Center because this building was the symbol of American strength, pride, and capitalism. My first question is why the World Trade Center in New York City, and not the Empire State Building or the Statue of Liberty? What about the U.S. Capitol Building, the Washington Monument, the White House, the Super Dome filled with spectators, or San Francisco’s Golden Gate Bridge? Also, why did they not wait for the Salt Lake City Olympics broadcast on world-wide television, or bide their time until a national political convention where they could have taken out half the leading politicians of the Democrat or Republican Parties?

Why did Moslem terrorists twice target the World Trade Center? Surprisingly, with all the news articles, TV talking heads on the nightly programs, and pronouncements from politicians, there has been little discussion on why this particular target was chosen above all others. Have you considered just maybe there is a reason for the code of silence and blackout on all such discussions?

What if our politicians, Wall Street, and the media fear the real reason for the terrorist targeting of the World Trade Center Towers, but our establishment has decided not to go public and disclose the risk for fear of public and financial panic? Shouldn’t we know the truth so that the citizens of New York City, specifically those working in the financial district, can judge any future risk for themselves? What about American investors? Is fear of a market panic or a wholesale withdrawal from the U.S. markets and the dollar by foreign investors another reason why there has been little press coverage of the threat?

I fear the real target of both prior attacks was Wall Street and our financial system – not just some tall buildings. Could the terrorists have been trying both times to actually bring down the World Trade Center towers on the New York Stock Exchange and Wall Street? The answer could be yes. One thing is for sure-they were trying to disrupt the U.S. financial system and discover our countermeasures against this type of attack.

Those who do not want to explore this risk will claim that this is merely talk to generate panic. They will say that there is no risk of terrorist attacks to the financial markets. They will allege that our financial markets are immovable and invulnerable to such attacks. They will assure you not to worry about the terrorist risk to your portfolio, liquidity and retirement funds. Unfortunately, the experts have been wrong before.

“Well, don’t worry about it….It’s nothing.” — Lt. Kermit Tyler (Duty Officer of Shafter Information Center, Hawaii), upon being informed that Private Joseph Lockard had picked up a radar signal of what appeared to be at least 50 planes soaring toward Oahu at almost 180 miles per hour, December 7, 1941

Thanks to the repeated financial and news channel press reports during the 9/11 market closure, the location of the offsite back-up and record systems for Wall Street was revealed. I fear that terrorist networks could be in a position with a weapon of mass destruction to destroy the back-up systems as well as targeting Wall Street. This could be catastrophic to your investment records, liquidity, and portfolio values in the event of an attack.

Could the reason that no one is talking about the threat be that our politicians and the financial establishment really are deathly afraid of what could happen to the American stock and bond markets, the NYSE, NASDAQ, and the dollar, should this veiled threat become public knowledge? I feel the risk is certainly worth considering if you have the majority of your portfolio undiversified and only in the American dollar and US-based investments like stocks, bonds, mutual funds, US variable annuities, or insurance products.

It is entirely possible that if another terrorist attack took place against Wall Street or the Stock Exchange, financial panic and a substantial market meltdown would ensue. But like the earlier tech stocks collapse that finally ran its course, no one in authority is willing to warn the citizens of New York City or investors to be aware of the risk to their stock and dollar denominated investment holdings. Remember in the conventional investment business, no one ever says sell or cries fire even if the theatre is filled with smoke.

Now is the time for some straight answers for the citizens of New York City who have already suffered so much. What is the chance of a third attack on Manhattan with a weapon of mass destruction, and how many hundreds of thousands could die in this attack? Every investor deserves a realistic appraisal of the terrorist risk to his or her portfolio values. However, it will be up to you to do the research, since you will hear nothing from Wall Street or your financial professional until it is too late.

These are the tough questions that our politicians, Wall Street, and the media should be asking and planning for. This is their responsibility and if they fail to do their duty, then they should be held accountable when the attack comes. Their delay and hesitancy in confronting these risks are reason enough for Americans to consider some additional diversification of their portfolios into non-U.S. dollar and quality foreign equity investments. Still, rest assured most Americans will trust “the experts” until it is far too late. Maybe George Santayana had the vast majority of American investors in mind when he said, “People never believe in volcanoes until the lava actually overtakes them.”

The Primary Target of Opportunity Is Wall Street and America’s Financial Infrastructure

The terrorists understand America’s Achilles heel is the vulnerability of our financial markets. The 9/11 attack costing approximately $250,000 to organize destroyed up to $30 billion in property damage in New York City and caused a market panic destroying over $1 trillion in stock market valuations. It pushed many airlines in the U.S. and Europe to bankruptcy. When compared to an attack involving weapons of mass destruction, 9/11 would be considered a minor strike, yet even this created a serious global recession. Just as the last two attacks were on the World Trade Center, I believe a future WMD attack will also be directed against New York City. This center of our American stock and bond markets has already proven vulnerable to attack and impossible to defend against attacks of terrorism.

An attack with weapons of mass destruction on New York City would, by its nature and scope, also take out our back-up financial systems that would be crucial for surviving this type of attack. Now, thanks to the news coverage and short-sighted attempt to generate confidence in our financial system after the World Trade Center attack, the world knows that most of the back-up operational centers, crisis re-location, and records storage for the major U.S. banks and Wall Street investment firms are by necessity located within close proximity to Manhattan. These crisis centers are worthless without the trained personnel to run them and keep the firms operational, so they must be near enough to their present locations for the workers to get to the alternative working places. A successful attack with weapons of mass destruction would probably take out these sites thus destroying the stock markets, firms, and records for some indefinite period. While this is the real threat to the U.S. financial markets, there are other even more vengeful reasons for Islamic terrorists to strike New York City.

The high-density population in Manhattan and the surrounding boroughs means this type of weapon would generate the highest population kill ratio, in addition to taking out the guts of the U.S. financial infrastructure. They would consider most of the population deaths surrounding New York City as acceptable collateral damage due to demographic and political reasons relating to their goal of destroying the state of Israel.

We must also address the fact that most Islamic fundamentalists have extreme hatred for Israel and seek to destroy the State of Israel. However, as stated earlier, it would be counterproductive for these terrorists to target the nation of Israel for an attack due to the existing Moslem holy sights, massive Palestinian deaths, and the likely nuclear retribution by the Israeli armed forces. Remember the demographic breakdown in that region is around 5 million Jews in Israel, and its occupied territories, and close to 4 million Arabs.

Where is the next largest concentration of Jews in the world after Israel? New York City. With a population of almost 2 million Jews, this accounts for over 1/3 of the entire Jewish population in the United States. Therefore, Moslem extremists would view the prospect of wiping out much of New York City as a positive development. Not only would it decimate the U.S. financial markets but also the substantial American based Jewish financial and political support for Israel.

In other words, from the terrorists’ point of view, taking out Israel directly is a dangerous risk because of possible nuclear retaliation. On the other hand, taking out New York City destroys America’s investment markets, our financial infrastructure, and a substantial percentage of the Jewish population. The latter consequence in and of itself is important to them because with the strong Jewish population in New York City goes much of the American-based financial and political support for Israel.

Moreover, the government of Israel would have little to lose in nuking their Arab adversaries if the continuity of their tiny nation state ended due to extremist attack by deadly weapons of mass destruction where as it is doubtful if the United States would respond in a similar manner. While an outraged United States would go after the guilty parties and nations with nuclear weapons if New York City were destroyed, they probably would not attack the other Arab states not involved in the conflict. This might be an acceptable cost to the Islamic extremists.

The question at hand is do terrorists have weapons of mass destruction at the present time? I hope and pray the answer is no. The Jewish people and others have already suffered one holocaust in Europe from fanatics who believed in their evil cause. The Nazi’s believed the end justified the means and this is the same mindset of the Moslem terrorists in the world today. We must avoid and defend against the possibility of a terrorist attack using biological, nuclear, or chemical weapons of mass destruction on New York City.

Terrorist Attack Defense Options

What can we do to protect ourselves, both individually and our larger financial markets, from the risk and destruction of an attack? First, do not count on our intelligence services to warn us. It is apparent from the 9/11 attack on the World Trade Center, the attack on the Cole, the ’93 World Trade Center bombing, the cruise missile attacks on the Aspirin factory in the Sudan, as well as in the invasion of Afghanistan to get Osama, that U.S. intelligence has failed miserably in dealing with anti-Washington terrorist forces. Why should we have any confidence in them now?

Do not trust the federal government to warn you. No one really knows the amount of risk here and politicians will always do what they must to prevent panic in the streets and in the investment markets, or risk their chances for re-election. The public reaction to this threat could paralyze the already weak economy of New York City, as well as shatter the dollar and stock and bond markets. The government would never come out and warn of this possible threat to Wall Street and New York City anymore than a major investment brokerage firm would ever tell its clients to get out of the market because a bear market or crash was coming. A notice such as this could cause the market to crash so you must assume that no timely warning will ever be issued.

Many investment clients and readers of my books and articles have asked me over and over again: “why didn’t my broker tell me to sell my stocks at the top of the bull market? Why didn’t my investment advisor liquidate my stock portfolio near the top of the market and then go to cash? Why did the Wall Street establishment financial publications or the TV and financial news remain overly optimistic about a market turnaround on the NASD, which fell from 5,000 to under 1,500?” The simple answer is they will never tell you when to totally sell or get out of the market and nether will the same vested interests warn the citizens of NYC or stock market participants about the potential terrorist risks to their remaining savings and investment portfolios.

What is important to the political establishment is always the survival of the system, the markets and their own best interests, followed by us. Any politician that warns of this risk would forever be out of politics if they had the personal integrity and courage to give this warning and then nothing happened. Any investment firm that recommended all their investment clients to sell stocks and go to cash would be out of business if the crash did not occur, or forced out of business by the regulators for helping cause the crash if they were right. In other words, they would be damned if they did and damned if they didn’t, and thus they are in a no-win situation.

As the markets move up or down, the financial establishment and media constantly remain overly optimistic during the bull market phase. During the pullback or bear market they continually promise that an upturn is just around the corner. Thus, they prevent panic that might destroy the brokerage firm or do even more damage to the investment markets. All investors lose money in a major crash (except for the insiders) and misery loves company. In a crash or bear market, everyone looses but the financial firms and inside players. This type of outcome is certainly better for the industry than the alternative of a no-win situation where financial firms warn clients to get out and either the markets tank and the firms are blamed for starting the crash by the regulators or media or the crash doesn’t happen and the clients leave because they sold out of a market that continued to go up.

Our nation’s foreign policy of intervention around the world has undoubtedly helped cause the hatred leading up to the current conflict. But now is not the time to discuss our past mistakes or to cast blame. Do not allow pressure by the Washington politicians and financial elites to keep this important topic and threat blacklisted from the American public, or out of your mind as a potential threat to your wealth. I believe this threat to your portfolio and financial well being could well be the greatest risk to American investors since the Crash of 1929 and the Great Depression.

Our political leaders have failed to follow the wise counsel of George Washington with regard to a balanced policy in foreign affairs and minimal military intervention around the world. We are now suffering the consequences with this terrorist war on America. I fear that if we do not begin today, as a nation and as investors, to follow another sound bit of advice from George Washington, that we will pay a price far higher in death, destruction, and economic disruption.

Webster’s Collegiate Dictionary defines deja vu as – something overly or unpleasantly familiar. Anyone that has been in the staffing business since the late 1980s and early 1990s knows exactly what this means when referencing worker’s compensation. Prior to the early 1980s no one concerned themselves with the cost of worker’s compensation nor did they talk about the roller coaster effect of premiums.

There were no terms such as “soft market” or “hard market.” But in the mid to late 1980s worker’s compensation insurance costs started spiraling upward. The upward swing saw many companies lose their business and forced others to turn to self-insurance, retention plans or other means of alternative insurance. Everyone knew that the state fund or assigned risk pool was a proverbial “kiss of death” for a staffing firm. Then in the mid 90s, without much notice, the market began to soften. Companies who had once fled the insurance market for other insuring vehicles found that the cost of workers compensation through conventional means was much more attractive from a cash flow perspective. In fact, staffing firms were being solicited by many carriers and enjoyed the benefit of a small pricing war. Premiums that were far below prior years losses were being quoted to companies. Modifiers were being ignored or negotiated down and premium credits became the norm as opposed to the exception. Little concern was shown for a company’s risk management program. It was a real feeding frenzy by carriers.

The reasoning behind this “soft market” was that companies had identified the problems associated with injuries and resolved them. Losses were trending down nationally and there were those that said that the market would never go “hard” again. Carriers paid little attention to the insured’s attitude toward safety and loss control when considering a quote for insurance. It is true that there are reasons that can explain the soft market, but the ones mentioned here are not the real reasons. In order to survive a hard market one must know why it occurs. By knowing what drives a market soft or hard, a company can position themselves to experience minimal impact and survive.

First let’s look at the actions taken by companies when insurance costs started to spiral. Most companies began looking for ways to lower their premiums and in the early 90s, found that if they would retain a level of their losses, carriers were willing to give better pricing. The more retention taken the better the pricing offered. But this would mean that the insured would need to improve their safety and loss control program to ensure that deductibles they had to pay (retention levels) were kept to a minimum. Much attention was given to the implementation of comprehensive procedures to identify potential employees that might be apt to be injured or to file a fraudulent claim. More safety training was provided to employees. Drug screening became very popular and most companies hired or designated risk managers, qualified or not. A new process of qualifying clients became popular and a team effort for increasing safety and reducing losses was developed between staffing firms and their clients. All of these actions resulted in a significant reduction in loss ratios (losses divided by premium) that opened the eyes of a few carriers. At this time most carriers were reluctant to write worker’s compensation insurance for staffing firms because they did not believe that the industry could control the worker or the work environment and historical data confirmed this. Remember, this was a period in time that most people thought of staffing firms as “secretarial pools” or “rent a drunk.” And with average loss ratios of 150% or greater, payouts for losses were far exceeding premiums collected. So who can blame carriers for not wanting to accept this type of insured? With the advent of all of the intensive risk management being implemented coupled with several months of success resulting in loss ratios of 35% or less, and the retention of some of the losses, the prospect of being profitable by insuring staffing firms surfaced and some carriers decided to take the chance.

But it wasn’t just the good risk management procedures that provided the incentive to insure a known high-risk industry. If you look at the graph of the stock market over the past ten years, you will quickly realize that there is a direct correlation between it and the insurance market. Here’s why. Insurance companies collect premium from clients but they do not pay claims right away and when they do pay the claims, it is usually over a period of time. This allows them the opportunity to invest the money and earn a return. When the markets are doing well and returns are great, carriers are more interested in the amount of volume they have as opposed to the quality of the insured. An example of this is that in one recent year the insurance industry reported four billion dollars in losses. (This sounds like a lot but is a relatively small amount.) That same year they reported thirty-four billion dollars of investment income. With a thirty billion dollar net, it is easy to see why they would want the premium dollars regardless of the risk. The fact is that the pendulum swung so far in the other direction that in many cases a company could get a guaranteed cost policy for a price less than that of the retention programs. This would prove to be short-lived and the pendulum returned at a very swift rate when the interest rates began to fall and the stock market began its downward trend.

Another factor that must be considered is the number of catastrophes that occur in a given year. Hurricanes, earthquakes, floods, drought, fire and tornados can have an impact on all types of insurance premiums. Few insurance companies limit themselves to one type of coverage such as worker’s compensation. They usually have a variety of lines of coverage. If carriers are hit hard from the above mentioned catastrophes or if they lose millions in lawsuits from employment related issues such as discrimination, it will impact all premium costs. In the mid-nineties, catastrophic losses were minimal. If a carrier suffers losses to the degree that they are forced to shut down, there will be a rippling effect on all insurers. An example of this is the failure of Universal Re. When they were forced to shut down due to poor underwriting procedures, almost immediately prices increased across the country, from five to twenty percent as other re-insurers scrambled to protect themselves from a similar fate. Many front line carriers either failed or saw a significant decrease in their financial position.

In 1998, some insurance experts began to warn of the upcoming hard market. But the economy was booming, prices were still low and these warnings fell on deaf ears. These experts realized that it was unlikely that investments could sustain their high returns. It was also evident that companies were becoming complacent with their risk management procedures. This coupled with the likelihood of a catastrophic year gave reason to warn companies of the impending hard market. And as these experts predicted, the hard market returned.

For some it is too late to salvage their businesses because the insurance companies had turned their heads to the staffing industry and the high cost of worker’s compensation in the state fund or assigned risk pool eliminated all profits. Some have just closed their doors while others have surrendered their businesses to larger firms for far less than the actual value. And many more will follow before this hard market is over.

Now that you know some of the reasons behind the fluctuating market, what can you do to survive and avoid becoming another casualty? First and foremost you must develop a mindset of long term planning as opposed to “insurance carrier hopping.” Insurance carriers are looking for companies that want to establish long-term relationships as opposed to those that jump ship every year. This type of relationship affords the carrier the opportunity to better understand the insured’s needs and to benefit from averaging. Every company has the potential to have a bad year. This bad year can be softened if it is averaged in with a few good years. When you develop a relationship with a carrier and stay with them over a period of time, both will benefit. You must remember that price is not important; it is cost that counts. A low upfront premium could ultimately cost you thousands more if the company provides poor service. This could include poor claims handling or inadequate coverage due to hidden exclusions. Regardless of who is to blame, a year of high losses will negatively impact your ability to secure affordable insurance. If this is your current situation then do something about it now!

Second, consider some level of retention when possible. By accepting responsibility for the first level of claims dollar you have an incentive to reduce or eliminate a large portion of these claims. It is also important to remember that for every dollar the carrier pays you pay $1.50 to $2.00. If you pay the first dollar then you can save 50-100% on that portion of the claim. Make sure that your contract does not allow the carrier to up charge you for those deductibles. Retention levels come in a variety of amounts and as they get larger you must be aware that the carrier will require that you post collateral in the form of a letter of credit or cash. This can have a devastating impact on cash flow and growth. The most common retention levels are $10,000, $50,000, $100,000, $250,000 and for the larger companies $500,000 to $1million. Captive and Rent-a-Captive programs can be very favorable because they allow you to have better communication with your servicing providers and usually provide you with a return of a portion of your premiums after a low loss year. Many of these programs will also provide you with investment income dollars that normally go to the carrier. But beware. It is important that you have a thorough understanding of how these programs work before making the move. These types of programs are most assuredly designed for those with long-term plans for their business and a serious attitude toward controlling losses. If the program you are considering does not have this mode of operation, then avoid them. Captive-type programs may require a larger amount of upfront cash, but the long-term gain will greatly reduce the cost of insurance. Because they are less cash flow sensitive on the front end it is important to review your financial position prior to entering this type of program.

When deciding on a program it is sometimes best to secure the services of an impartial third party consultant to review your “Insurance Desirability” before making your decision. The advantage is that the consultant will not influence your decision based on the amount of commission to be earned as might occur with a broker, agent or other direct writer. One company that recently took this approach paid a small fee to have a consultant review their broker’s proposal. After careful analysis, the consultant, working with the broker, was able to identify areas that would better suit the insured. The result of the review was that the company reduced their renewal premium by 48%. The consultant’s fee was 1%. That is a net savings of 47%. This may not happen in your case but it wouldn’t have to be that good to be worth talking about.

Finally and most importantly, step back and take another look at your risk management program. Careful analysis will most likely reveal areas that have fallen off due to lack of attention. Situations change and you may need to add or take away certain parts of your program to make it better serve your company’s needs. Sometimes you must weigh the cost of a safety process against the end result. If the cost exceeds the benefit then you may decide you don’t want to implement this particular process. Look for opportunities to make risk management easier for your staff to implement and remember that they follow your example. If you don’t stand firm with your program you cannot expect your staff to be any different. Provide them with the necessary tools for effective risk management and hold them accountable if they fail to use them. Make sure that if a carrier considering a quote for your company decides to visit your facilities that there is solid proof that you are a good risk. Don’t expect them to believe you just because you have a risk management book and a few forms. They have fallen for this in the past but won’t fall victim to this action again. Prove it without a doubt by making risk management an everyday part of your operation. The result will be fewer dollars spent on losses and bigger savings on renewing policies.