How to Lower Business Insurance Premiums.
Lowering your business insurance premiums is a continual process. Taking one
business day to review your premiums can result in savings. This review can
be conducted annually or whenever there is a change to the business
significant enough to warrant a review.|
Time Required: This is a constant process - set aside a business day
annually to review your premiums.
Make Sure You Have Copies of All Policies and Update Your Insurance File
Start your review by looking at your insurance file. If you don't have a
file, now, is a good time to start one. Make sure that you have copies of
all policies in your file and readily accessible when needed. Make sure
there are copies of claims forms for each policy in the file. You will want
to create a separate off-site location for a copy of your policies and forms
in case this file is destroyed.
Organization is the first step in reducing insurance premiums.
Compare Your Schedules to Autos and Equipment Actually Owned
A good place to start with your premium review is an analysis of your
equipment and auto schedules. Does your business still own the vehicles
listed? I know of a business that insured a crane for ten years after it was
sold. Maybe your line retooled and key equipment was changed and this can
result in premium savings.
Compare Your Named Insured and Key Employees to the Employees That Work For
Much like Step #2, this step involves reviewing named drivers and/or key
employees identified on policies to make sure these people are still with
your company. Many employers simply fail to adjust their
named insured endorsements when employees leave. But, this can result in
significant savings if the loss of the employee results in lower risk.
Look for Irrelevant or Repetitive Coverage
Business changes and it may change dramatically. Some coverage may no longer
be necessary. For example, if a portion of your business closes, operations
change, or you choose to out source, then it may be that your business
carries coverage that can be eliminated.
Adopt and Maintain a Consistent Safety Plan
A consistent safety plan will include the elimination of hazards that can
become claims. Make it a goal of your business to enforce a safety plan and
follow through. I suggest developing a tracking mechanism for the safety
plan because otherwise it is impossible to gauge the effect of safety on
insurance premiums. A simple method is the "safe day" method. Every shift
marks a calendar tracking "safe days", that is, days without injury to a
worker or patron.
Classify Your Workforce Correctly
Significant savings can be achieved by making sure your workforce is
correctly classified by your workers' compensation insurer and liability
insurer. Your premiums are based on the type of workers used. If you are a
painting company that incidentally uses ladders, then you could be
incorrectly classified as a construction business and your premiums will be
greatly inflated. If you have a large sales force and those sales people are
being classified as line workers, then your premiums will be much higher.
Classify each worker and make sure your insurer does so also.
Discuss Your Premiums With Your Insurer and Insurance Professional
Too many businesses don't take the step of telling their insurer that they
want a better rate. Frequently, insurers will discuss the premium in detail
and will suggest ways to have it reduced or the insurer or insurance
professional will learn something about the business they did not know that
may result in lower premiums. It never hurts to ask.
Become Active in Trade Organizations or Professional Associations
Most trade organizations or associations have affiliate members that are
insurance companies. As a benefit of membership, your business may receive
substantial insurance discounts. Membership in such organizations is very
reasonable and can lead to increased business through networking.
Adopt Health Specific Changes To Your Work Place
Health premiums and workers' compensation premiums will be your highest -
work to lower the costs through a healthy work force. Commit to setting a
good example: quit smoking, become active and see your physician regularly.
Adopt a no smoking policy at your company. Allow yoga or weight loss classes
to be held at your break room. Encourage proper lifting techniques. Consider
a partial reimbursement of health club membership as a benefit. In other
words, taking active steps to create a healthy work place lowers premium
Training, Training, and More Training
Train your workforce and demand training as part of their employment. Most
Insurers will offer substantial discounts for a trained workforce. For
example, liquor liability premiums can be cut by 15-20% if servers are
required to attend alcohol awareness training. Find out what training will
reduce rates and get your employees involved.
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