How reduce your commercial Insurance premium(s)

How reduce your commercial Insurance premium(s)

How to reduce your commercial insurance premiums.

While business insurance policies are specialised insurance products, the basic principles of insurance remain the same; higher risks obtain higher premiums. In order to lower premiums with any form of insurance, you must find ways of keeping your risk at a minimal level.

Where business insurance is concerned, lowering your premium is not just about saving money, but also about prudence and ‘best practice’. Although there are unavoidable business risks and natural perils, there are ways in which you can control the level of exposure that your business has to certain risks.

1) Perform an insurance review
A business insurance review entails filing your policies and business records initially. Then, you must analyse your insurance policies in the context of your business and current operations. This is necessary because businesses exist in a dynamic environment and there are periodic opportunities for premium savings.
A performance review can reduce your business insurance premium in the following ways:
a) Eliminating excess or repetitive coverage
b) Suspending pending claims that may negatively affect your premiums
c) Using updated/ accurate classification codes for specialized types of business insurance. Incorrect classification codes raise premium rates, so this aspect is very important.
d) Review insured perils- If your business operations change in some aspect, your insurer is likely to reduce your premium based on the business’ reduced risk exposure.

2) Deal with a good Insurance Broker and view your broker as a partner
The notion that your insurer or broker will try to squeeze higher premiums from you is often misleading. There are many trustworthy insurers, brokers and agents out there with high levels of integrity. You need to find those and work with them to determine what you can do to reduce your risk. Insurers appreciate this since they would likely have fewer or no claims from you.

3) Increase asset and revenue security
Insurance is one way to protect your assets. However, you can reduce the insurance premium by securing your assets in the following ways:
i) Installing security and fire alarms
ii) Having security officers on the premises 24/7, especially in high-risk areas
iii) Conducting electrical maintenance periodically
iv) Reduce possibility for business interruptions (securing computer systems and networks, reinforcing glass used on business premises)
v) Reducing the amount of cash that you keep on your premises
This is far from all that you can do with respect to reducing premiums on Property and Casualty Insurance. The most important aspects of implementing these measures is that they help you to reduce premiums and prevent loss. Even though insurance provides compensation, prevention is better than cure.

4) Pay attention to people
Whether it is your clients, the public or your employees, you must ensure that you make proper provisions to avoid liability that lead to insurance claims. Ensuring occupational health and safety is critical to reduce the risk of injury to workers- especially in high-risk industries. Using the correct current classification codes for your industry and workers can also result in lower premiums. It is also advisable to submit the base salaries or wages of your employees to your insurer, excluding overtime and bonuses. Inflating your worker’s salaries inadvertently will inflate the premiums that help to protect them.
As far as your liability is concerned, it can be as simple as putting warning signs and proper boundaries for the public. You can also implement quality control measures for your products that could reduce your product liability. Insurers also favourably regard training for your employees in the areas of health and safety processes and procedures.

Other ways to reduce your business insurance premium include:
i) Using higher deductibles: increasing the amount and number of deductibles on your insurance contract will reduce the risk that you pose to your insurer.
ii) Fewer claims/losses: Reducing the frequency of claims/losses that your business makes improves your risk rating.

Reducing business insurance premiums can save your business a lot, so talk to us in DoyleMahon about ways to reduce your premium whilst also ensuring you have the right covers in place.

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