Loss “recommendations,” often referred to by insurance carriers as loss recs, are anything but recommendations in 2025. Years ago, the carriers would issue recommendation lists for items to maybe upgrade or work on around the property to better protect the association and building. With this current hard market we find ourselves in and the absorbent amount of claims the carriers are dealing with, loss “recommendations” are a thing of the past, and loss “requirements” are here to stay.
Loss recs are issued for most General Liability and Property policies. If you have a renewal coming up, you should expect the carrier to conduct an interior and exterior inspection. Upon completion of the inspections, a loss requirement list is generated by the carrier and then sent to you. Carriers expect, at the very minimum, a response and plan for action within 30 days of receiving their rec list. In the past, we may never have heard from the carrier again after receiving their recommendation list. Today, we usually receive the carrier’s first follow-up two weeks after receiving their requirement list, with frequent follow-ups until they receive proof that every item has been complied with. Unfortunately for the insureds, the best way for the carrier to make sure the items are being completed is to threaten non-renewal or mid-term cancellation. If you are nearing the end of your policy term and have open loss recs that have not been complied with, you can almost certainly expect a non-renewal to be issued on your policy. Once the non-renewal has been issued, you will have up until the expiration date of the policy to send the carrier full proof of compliance for any outstanding loss requirement.
In some cases, depending on the severity of the recs you have been issued, the carrier may issue a notice of cancellation. Under these circumstances, you will have 30 days to complete your rec lists and send proof of compliance to keep your current carrier on the policy. Unfortunately, the list of what carriers deem to be “critical” loss recs continues to grow rapidly, and it is now more evident than ever that loss requirements are becoming a carrier’s top priority and can produce a cancellation just as quickly as non-payment.
Sidewalks, tree pits, parking lots, and any cement-related loss recs are examples of the carrier’s cracking down. In the past, if you had cement work on your rec list in the winter months, the carrier would allow you to wait till spring, when it is much easier to do this type of work. That is no longer the case. I have seen numerous cancellations issued in the winter months due to non-compliance with cement-related loss recs. As claims continue to rise for slip and fall incidents, it has become a carrier’s worst nightmare to have a broken sidewalk under snow and ice, and issuing cancellation or non-renewal has become their go-to step to ensure this gets done. If you receive any cement-related loss recs, it is highly advised that you hire a licensed and insured contractor and complete the work as soon as possible. Waiting for the winter to come and pass to get to spring is no longer an acceptable course of action.
Can we shop the policy if we do not want to do the work?
You can always have that conversation with your Account Manager and review your options, but it is very important to understand the facts of doing so when shopping the policy with open loss requirements. If you have a list of loss recs that you do not wish to comply with, shopping the policy does not make them go away and, in most cases, will make the situation worse for the building. When shopping a policy that has open loss recs, a non-renewal, or cancellation issued, any potential new carrier will know this prior to issuing you a quote. In most cases, the policy will need to be shopped within the non-admitted market, which will most likely come with higher premiums for less coverage. Loss recs are not issued by one specific carrier. All carriers have cracked down on loss recs and treat them with top priority. Any potential new carrier will schedule their own inspection and issue their own set of loss recs. In some cases, they expect you to complete both your old list from your former carrier and the new one they issue you. Cement-related loss recs are almost a guarantee to be added to the list of loss recs your new carrier issues. It is common to see insureds that switch carriers getting hit with longer rec lists, so I highly advise you to complete the rec list from your current carrier.
The current state of loss control within the insurance carriers is rapidly changing and I anticipate restrictions and guidelines are only going to get tighter. If you see the word “recommendation,” do not be misled by this as it is almost a guarantee your carrier will not renew your policy with open loss recs. The carriers want to be kept in the loop and updated every step of the way. You can do so by sending any signed proposals, contracts, invoices, documentation, and upon completion, photos showing the work has been completed for each item on your rec list.
Click here to download our free list of common loss recs and how to solve them, and reach out to us with questions anytime.
