The start of a new year greeted me with annual renewals at my house. One of those renewals was my personal insurance, both home and auto. I don't know about you, but whether it's automobile insurance or my home owner's premium, I cringe at the fact of paying my annual insurance premiums. In essence, I always feel like I'm paying too much for what I get, and for the most part, I never seem to realize the true value. But, all that said, it's one of those “products” I simply can't go without. Do you feel the same way?
Deductible or no deductible, experience tells me you probably feel the same way. That is until we have to use that insurance for a claim, or in other words, when something unexpected happens.
The sentiment seems to be the same in the electric power business. When a customer purchases an electric power product, from any OEM, that carries a standard warranty – that customer has an expectation that that product will perform flawlessly, at least throughout its standard warranty period, and typically beyond. In most cases, that's exactly what happens, until of course, something unexpected happens.
What makes you feel comfortable after the standard warranty period expires? Do you look to the OEM to provide insurance on the product? Do you look outside the OEM for insurance? Maybe you decide to roll the dice and manage potential failures on your own. Bank the money and simply pay as you go. As a fact of my personal life, I know I can't afford to roll the dice against my assets. But in this business, I see it happen all too often. The biggest reason: it's perceived as being too expensive. But is it?
With continuous technology advances in the electric power business, how can your business sustain the risk of the unknown? I've seen simple failures turn into insurance claims of $100K or more. How do you bank your money successfully knowing, that if a catastrophic failure occurs, your company, and your job is secure because you have budgeted enough... no matter what? What's the right amount?
Tell me how you feel about insurance for the electric power business. Do you view it as good risk avoidance and money well spent for your business, or do you simply perceive it as paying too much for something you may or may not use? Post your thoughts below.