Business insurance is an essential and continual expense for any venture and can make up quite a sizeable chunk of its operational expenses. Lowering your insurance premiums can literally add to your bottom line.
1. Review your business operations regularly and keep your records up date. Thorough, proper documentation is not only key to obtaining adequate insurance, but it can also help lower your business insurance premiums. Each year, your business insurance premiums are based on information obtained from your records. If, for example, you implemented security procedures that have reduced theft, this documentation will help lower the premiums for your theft coverage.
2. Keep close inventory of the physical assets of your business. As an asset depreciates, the insurance premiums charged also drop. For this reason, it is important to provide your insurer with this information at every policy renewal. You should also inform the insurer of any assets that you have disposed of, so that you do not continue paying premiums for them. It is not uncommon for some businesses to continue paying premiums on a piece of equipment they no longer use or own.
3. Adjust your insurance coverage to reflect your employee rolls and turnover. If an employee is listed on your insurance policy, for example as a driver, you can realize some insurance savings if that employee leaves your company.
4. Review your insurance coverage each year to ensure that you do not have duplicate coverages or coverage that you may no longer need. For example, if you own a home-based business, consider calling your homeowner’s insurance company and find out if you can add business riders to your Home Owner’s policy, to replace coverage that you may be getting from a Home Office policy. This would eliminate coverage that is duplicated by having both policies.
5. Develop a comprehensive safety plan to help eliminate or minimize hazards that may result in an insurance claim. Get your employees involved and committed to the safety plan. Invest in training your employees as well – insurance companies often offer significant discount for a trained staff. Programs such as a Safe Driver course for drivers or Alcohol Awareness class for bar servers will typically save you money on your business insurance.
6. Take advantage of group rates to save money on your business insurance. A number of organizations such as your local chamber of commerce, self-employment organizations and the CFIB offer their members group insurance plans at discounted group rates.
7. Discuss your premiums with your insurance company and ask for a better rate. Your insurer will often be willing to review your policy in depth, and suggest ways that you can save on your premiums. An in-depth review may also give your insurer a better understanding of your business operations, and even learn an aspect of your business that may result in lowering the premium.