The goal of any business is to lower the costs, while simultaneously increasing profits. As you probably already know, this can be easier said than done.
At the end of the day, the costs incurred when running a business have just as big an impact on your bottom line as the profits earned. One of the largest potential costs for a business is insurance coverage.
Unfortunately, several businesses will pay increased insurance payments, year after year, without ever evaluating how they might be able to reduce the amount they pay. For the savvy few however, there are some proven ways to get a lower insurance premium.
Compare and Analyze Deductibles
By sitting down with your insurance agent and going over each plan with varying deductibles, you’ll be able to determine an insurance plan that’s right for you. Many business owners will find that they are paying more than they need to be based on their appetite for risk. It’s too easy to end up paying a fortune to minimize your deductibles, even when the event your insuring against is highly unlikely – and potentially not that damaging to your business.
Catastrophic events like Hurricane Sandy remind us all that even the unlikely can happen but it’s important to take a dispassionate look at your business and assess 1) How likely the ‘unforeseen event’ is, and 2) how able you are to absorb the associated costs.
Can You Bundle Insurance Plans Together?
If your business requires multiple insurance types, you should be able to bundle your plans together for a reduced premium. An example of this would be a company that has a fleet of vehicles covered by vehicle insurance, while also having business insurance through a standard commercial insurance company.
In this case, a business owner may not realize that commercial insurance companies can also insure vehicles used for business purposes. Not only are commercial insurance plans able to insure them, they can do so at a dramatically reduced cost. Discuss bundling possibilities with your business insurance agent so that you can reduce your premiums.
Annual Evaluation of Company Policy
As we all know, insurance premiums are based on calculated risks. By evaluating your business policies each year, you may be able to reduce those risks, thereby reducing your business insurance premiums. Take for example ‘Company A’, a small construction company that uses ladder jacks and walk planks. This company will have a higher risk than ‘Company B’, which is also a small construction company which uses actual scaffolding. This risk increases the amount of business insurance premium that must be paid. In the long run, it may actually save Company A money to invest in more scaffolding.
There are several business specific ways to lower business insurance premiums. If your business has a fleet and therefore has several employee drivers, by fully performing DMV backgrounds on each driver, you can reduce risks.
Another example is if your company provides a service that requires employees to enter residential homes. By getting each employee bonded, you will dramatically reduce risks in the eyes of commercial insurance companies. As you can see, examining every aspect of your operations can have a beneficial impact on the amount that you pay for your business insurance.
The moral of the story here is don’t let your insurance plan roll over year to year without examining it. The market is constantly changing and competition for customers, like you, is high. It is beneficial to the bottom line of your business to find out exactly what is being covered by your insurance plan, how it can be reduced and who is offering the best rates. Happy Shopping!