4 Ways Businesses Can Save Money on Insurance Costs
While the attempted repeal of Obamacare has dominated the news most of the year, the reality is that most businesses have been left on their own to navigate rising insurance costs. Sure, the cost of health insurance gets most of the attention but other forms of insurance are also becoming more expensive.
If you need proof, then talk to any business owner who is trying to overcome the costs associated with a spike in workers compensation claims. As such, this article will look at four ways in which businesses can save money on insurance costs. Think of this as a way to bring a modicum of control to one element of your profit and loss statement which is largely out of your control.
1- Increase Deductible
Remember, most insurance coverage is meant to pay for catastrophic losses. As such, why are you paying for extra coverage that you don’t really need? One simple way to address this is increase your deductible. Sure, this will increase how much you need to pay if there is a claim.
But think about it, are you making claims every day? If the answer is yes, then you are either operating in a war zone or there is something is deeply wrong with your business. So, if you want to reduce your premiums, then increase your deductibles – this will put money where it belongs, in your pocket.
If you watch American Pickers, then you know that the guys like to bundle disparate items together to try and save on the overall cost. You should do this with your insurance coverage as well.
One easy way to do this is to sign up for a Business Owner’s Policy (BOP) as the premiums are usually lower than if you were to purchase the underlying policies on an individual basis. So, if you want to save money, then start bundling – you will be happy that you did.
3.- Know Your Past
When it comes to insurance, then you need to know that history matters. The reason is simple as most underwriters view past performance as an indication of the probability of a loss going forward.
This is especially true when it comes to property and casualty insurance as consistent claims could be viewed as a result of a lapse in operating controls – one which leads to a more dangerous workplace.
Don’t let this happen to you. Instead, no your history and work to train everyone on the safety measures which are needed to ensure your business will run smoothly. Doing so will not only lead to lower insurance costs, but you will also find that your operational efficiency will improve as you don’t need to continually stop to deal with an emergency.
Other things you can look at when it comes to your history is the credit record of the business and the owners as well as the driving records of the key people in the company. This is another easy fix to lower your insurance costs as good credit and driving records will show to insurers that you can make responsible choices on a consistent basis.
4.- Shop Around
Don’t just go to a website for insurance quotes; reach out to an independent agent who specializes in putting together insurance coverage options for businesses. Not only will this help to educate you and your fellow owners on the type and amount of coverage you need but it will give you another option.
Then you can take that knowledge and go online to see if there are any choices you might have missed before going back to your agent to finalize your coverage. While this approach might require some pain up front – learning about insurance – it will save you money in the long run as you will be making decisions on which coverage to buy not based on price alone but on what packages best suit the needs of your business.
There you have it, four ways to help you save money on your insurance costs. Now if the government could figure out a way to fix the health insurance market, then you would be really raking it in as lower premiums would effectively be the same as a tax cut.