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Do you think that your business pays too much for business insurance? If you are like most business professionals, your answer to this question is usually “Yes.” Here are five ways to reduce your business insurance costs without sacrificing coverage.

1.    Use Higher Deductibles

With any insurance coverage, (property/liability/automobile), higher deductibles can lower your business insurance premiums. Buyers often assume that lower deductibles are more beneficial, but this is always not the case. Higher deductibles can create the opportunity for premium deductions that often justify the additional risk assumed.

2.    Choose a Knowledgeable Advisor/Broker

One of the most effective steps you can take to reduce business insurance premiums is to choose an insurance broker who can best serve your businesses requirements. In many instances, insurance brokers are selected based on personal relationships instead of expertise and ability to do the job. Some of the critical factors that should be used to select an insurance broker are:

  • Industry experience
  • Staff support
  • General Insurance knowledge
  • Industry expertise
  • Ability to provide suitable insurance markets

3.    Maintain Communication

Regular communication with your insurance advisor/broker will enable you to receive the highest level of service possible. Increased communication will usually result in lower insurance premiums. Annual or semi-annual meetings are critical because you need to ensure that:

  • Your insurance broker is proactive in dealing with the changing market conditions
  • Your broker is staying on track
  • You address issues that may affect your insurance premiums before it is too late.

4.    Maximize Rating Discounts

Most insurance companies allow an underwriter to modify your property or liability rate either up or down based on individual risk characteristics. Some examples of the individual risk characteristics that can affect your business insurance premiums are:

  • Location of risk
  • Upkeep of premises
  • Years of experience in business
  • Alarm systems
  • Claims history
  • Sprinkler protection
  • Building construction

Always review the rating discounts with your insurance broker to ensure that you are receiving the maximum amount of available credits while avoiding any unnecessary surcharges.

5.    Provide Accurate & Adequate Information

One of the most common mistakes when going through the insurance bidding process is failing to provide the necessary underwriting information to insurance companies. To save time many business owners only provide a copy of their current insurance policy. This approach has many disadvantages such as:

  • Opportunity to add broader coverage and provide proper limits will be reduced by duplication of the same program
  • Underwriting and rating data may not be accurate
  • The loss history of the account is not available
  • Any mistakes or coverage issues would not be uncovered and will more than likely be repeated

To avoid these mistakes always complete a thorough insurance application or risk management survey.






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