A smart business owner always strives to reduce expenses whenever and wherever possible. Insurance is no exception to this. Too many business owners pay their insurance premiums every month without considering if there’s an option to lower their premiums. Consider these steps when trying to maximize your coverage and minimize your premiums.
Insurance Policy Review
Review your policies on an annual basis or whenever there is a significant change in your business options. And move your policies to the same effective date; many carriers provide discounts for writing more than one policy.
Review your policy for accuracy. There may be vehicles or property listed on the policy that you no longer use or own.
Review your schedule of equipment. Many policies may list equipment specifically and these items may be insured for actual cash value. Actual Cash Value is depreciated value not Replacement Cost. Therefore, if you purchased a piece of equipment for $10,000 five years ago, don’t insure it for $10,000 today. Find the Fair Market Value for that piece of equipment in today’s market and insure it for that amount.
Also consider reviewing your building insurance amount. Many policies automatically increase your building coverage every year. That may have been okay a few years ago when building values were increasing year over year, but that is no longer the case.
Safety in the Workplace
Emphasize safety in the workplace. An accident that never happened significantly saves the business owner for years to come. Consider exposures such as driving, property, liability and your employees. Establish a safety audit routine for your vehicles and equipment. In addition, properly train your employees on safe behavior and show them how to recognize hazards in the workplace.
Know Your Options
Finally, ask your agent to provide you with more than one option. Carriers’ appetites change sometimes on an annual basis. Consequently, so do their premiums. By reviewing more than one option you’ll have a better understanding of your premiums and whether they are adequate for your type of business.
About the Author
Brian Seamans has been a Property and Casualty Broker with InterWest Insurance Services, Inc. since 2004.