We get a lot of people asking us – “How can I save money on my business insurance?” so we
thought we’d write a quick article focused on the subject of saving money on a small business owners policy.
Know What You Need
What requirements does your landlord, bank, or other interested party have with respect to your property and liability insurance? On the liability it’s usually going to be a minimum of $1,000,000 and your property insurance limits should equal the replacement cost of your business personal property and buildings if you own one. If you have employees you’re required to have workers compensation insurance. If you have autos, you’ll of course need a business auto policy. Depending on your type of business you may need professional liability, directors & officers liability, umbrella protection, and several other forms. But starting off with a basic knowledge of what you’ll need is critical.
Work with an Expert
There a lot of different types of insurance and insurance brokers out there. To make sure you’re getting the best value in business insurance you should work with a broker who specializes in business coverage. It’s also a good idea to work with an independent insurance agent or broker who represents multiple companies as opposed to a captive agent or insurance company employee that only sells insurance from one company. Having choices and options will usually lead to decreased costs and improved coverage.
Be Upfront with the Broker You Elect to Work With
If you’ve had claims in the past, disclose them. If you’ve got questions, ask them. If you’re asked for information or details about the premises you occupy, your payrolls, or annual sales disclose it all. The more information you can share with your broker the better job he or she can do to negotiate the best deal for you. In addition to providing all the information you are asked for, it’s also helpful to be upfront about your objectives when shopping. Sure you want to save money and get a good deal, but you also want solid protection. Ask your broker to provide you at least 4 quotes from the companies he or she represents – by asking for this level of work from your broker you should provide them your commitment to do business with them; unless of course you don’t like the service or the quotes you get from them! The point is that shopping around with multiple brokers can be time consuming and confusing. By having multiple brokers bidding on your business are you sure you’re comparing proposals which are apples-to-apples? Probably not, because each phone call may deviate from the last with regard to coverage limits, underwriting information, the questions asked and the assumptions the broker may make. By working with one broker who can do the research for you and present multiple quotes saves you time, effort and frustration, while reducing the risk that something may get lost in multiple conversations with multiple brokers.
Consider Increasing Your Deductibles
This is especially true with your property insurance. Assuming some of the risk through a deductible will reduce premiums today and discourage you from submitting small claims in the future, which will only increase your rates.
Take an Active Role in Managing Risk
Simple things like good housekeeping, maintaining fire extinguishers, having a fire and burglar alarm, keeping employees and customers safe from injury and accidents are all ways to reduce the potential for claims which can drive up the cost of business insurance. Another often overlooked risk control idea is making sure you properly safeguard your money and securities from theft, employee dishonesty, and fraud. Simple accounting procedures that separate the duties of writing checks and making deposits from reconciling accounts can go a long way to prevent frauds. When it comes to protecting employees and reducing worker injuries the payoffs will be huge down the road.
Review your Policies
Depending on the size of your business you should undertake a thorough review of your policies with your broker at least every other year prior to your renewal date. If you run a larger business or have grown rapidly that a more frequent interval for review is a good idea. Your business probably doesn’t stay the same year to year so your insurance shouldn’t either! Conducting a review will help assure that your coverages are keeping pace with your needs, because an uncovered claim could be extremely costly!
Got questions? We’ve got answers! Don’t hesitate to contact us, using the contact box on this page or calling us at 800-287-4115 and we’ll be glad to chat about your business insurance issues, problems or questions!