Reduce Costs

Business Insurance T.V.

Frequently Posted Videos and Web Resource to:
Reduce Business Insurance Costs , Understand Business Insurance Concepts &
Use Risk Management Basics to Protect Assets

Reduce Costs
Insurance policies are complex and constantly changing, please consult your insurance representative regarding coverage on your business insurance policies. The information presented below is for education purposes only and does not represent coverage of any insurance policy or is it representative of all business insurance poilcies

Reduce Business Insurance Costs with 3 easy steps.

1) Use of Deductibles-
One of the key components of a business insurance policy is a deductible. Business policies
give you the ability to take large deductibles and save significant premium dollars. This is
over looked most of the time because most insurance professionals do not explain the
advantages. By taking larger deductibles some business owners can save 10% or higher on
their premiums. A word of caution, do not risk more than you can afford to lose. Consult
your insurance professional and decide which deductible level is appropriate to your
situation and your business.

2) Use of Credits from State Work Comp Programs-

Most States have premium credit programs to lower work comp costs. Unfortunately many
business owners do not know about them. Most of these programs revolve around safety and
loss record, hourly wage scale, overtime costs, etc… Consult with your insurance
professional and see what is available in your State. You could save 15-20% off your work
comp premiums with some programs. It is definitely worth looking into.

3) Checking you Auto & Equipment Values-

One of the easiest areas to cut premium costs is in values. If you have a business auto policy
or an equipment policy, regularly check the actual values against what is being charged on
the insurance policy. Many times the insurance companies are charging you premium for
values they would not pay when there is a claim. What happens most of the time is that
policies get renewed and values have depreciated, but your premiums do not get adjusted.
Consult with your insurance professional to review and bring in line your auto and
equipment values. You could see 5-10% savings on your policy premiums.

Reduce Business Insurance Costs by knowing these insurance processes

1) Understand the Audit Process

Business liability and work comp policies are audited by the insurance companies at the
end of each effective year. The process is done to "ante up" with the insurance company
any premium owed to them or if the company owes you. Payroll and sales are the two main
auditable exposures that are looked at. There are ways to reduce costs based on
understanding the rules of insurance auditing and underwriting. For example most
companies allow you to deduct a portion of over time pay off your payroll basis. Another
example that could possible save money would be the allowance of multiple different rate
and class codes if record keeping is adequate. Work with your insurance professional to
get to know the audit process. There are costs savings to be discovered.

2) Understand the Classification Process
In General Liability policies and Workmans Comp policies, premium is determined by classifications. Each classification has a rate that is associated with it. If you are a carpentry contractor then your liability and work comp policy should have the classification and rates that correspond to carpentry. However many times insurance companies assign the wrong classifications and the wrong rates. This could possibly cost you thousands of dollars in premiums. Making sure that classifications are accurate is a big step in lowering insurance costs.

3) Understand the Work Comp Experience Mod calculation. More premium is charged uneccessarily because of errors in the work comp experience mod calculation. Understanding this math equation is very important. With the help of your insurance professional, you should check to make sure that losses used to calculate the mod are correct. Make sure the loss year payrolls are correct since they play a big part in the math. Dig into the loss numbers to make sure no old reserves are not still hanging around and adversely affecting your mod. And finally, do not be afraid to question the mod with the COMP Bureau. The work comp experience mod is a critical factor in how much insurance premium you pay a year. Get to know this factor and the math behind it. it could save you lots of money.

Reduce Business Costs by Safety & loss Control

It is an indisputable fact. Business owners that have developed safety and risk
management as a priority and have programs in place, will pay less in business insurance.
Insurance policies set rates based on loss history. If you are a business that has few to no
losses and the majority claims are small, then you will be charged less for insurance.
There are lots of ways to make your business more safe. OSHA 10 hour courses, tool box talks, morning safety meetings, and outside classes and seminars are all ways to improve safety. What it really comes down to are two things, educating your employees and creating a safety culture and these have to start with the owner or top administrators. If the people at the top do not care about safety then the people that are employed won't either. If you
want to keep your insurance premiums down, make your business a safe and a low claim
establishment. Your premium savings will most likely pay for the cost to run safety
programs in a short amount of time.