Checked your company’s insurance policies lately? While your business probably has many fixed expenses, your outlay for insurance is something you can control. With some simple preparation, your company may be able to lower costs of business insurance across the board.

Start with a complete analysis of what you’re paying in premiums and for what. Many of us simply renew our existing policies without even knowing what we’re protecting. If you needed it before, you must need it now, right?

Wrong! Think about what you pay for basic business coverage, employee theft coverage, company vehicle protection, property insurance – you add it up and it adds up!

So, figure what you’re paying to which insurers for what coverage. Gather all your business policies in one place, and dig in. You can’t develop a strategy to lower insurance costs if you don’t know where you are now.

Look for errors. It may be worth the time and expense to have your insurance policies reviewed by the company accountant and legal counsel – even if you have to pay for these expert opinions. It’s a small cost when your business’ bottom line is at stake.

Check policies for duplicate coverage. You may be paying extra for business interruption insurance that’s already covered under your commercial liability policy. The company may still be paying premiums on a car sold last year. Or maybe you’re paying for insurance protection on equipment you own when, in fact, it’s leased. Check key employee coverage. You may still be covering a key employee who left your employ last June!

Once you’ve had the paperwork thoroughly analyzed by experts, there are steps you can take to cut those insurance costs.

Bundle and save. A little chat with a local insurance broker may save you a bundle by bundling. Perhaps you cherry-picked insurers over the years with a policy here, and another one over there. Consolidate commercial coverage with a reputable insurer and, chances are, you can cut costs – sometimes significantly.

It also simplifies paperwork, because you work with one insurer or one local agent who can act as an intermediary between you and the insurer. Use your local agent to get noticed by an insurance company.

Self-insure and save big time. The cost of a policy with a low, $250 deductible is more expensive than a policy with a $3500 deductible because your company assumes more risk. If you can raise your deductibles and self-insure, it may not take long to save enough on premiums to cover an unexpected equipment repair out of your savings.

Conduct a risk audit. Where is your company exposed? What are the company assets and liabilities? What would happen if…? Contact the U.S. Occupational Safety and Health Administration (OSHA) to schedule a routine safety audit. Also, have your insurer conduct an audit to identify risk exposure that might be missed by an OSHA inspector – for example, intellectual property or patents.

Review policies regularly. A local insurance broker can help here with reminders, suggestions for more or less coverage, regular onsite audits, and a review of your company coverages.

Plain and simple, you need commercial insurance – from commercial liability to company vehicle coverage. But it’s wise to know what you’re paying for and not pay too much.

 


The information provided is presented for general informational purposes only and does not constitute tax, legal or business advice.