Every business comes with serious risks – and most entrepreneurs know this. And this is the reason most business organizations take out insurance coverage to protect them against insured risks. The truth, however, is that most businesses pay higher premiums than is necessary – and if you are in this category, there are steps you can take to reduce your premiums without reducing your potential claims.
While all categories of policyholders desire to pay lower premiums on their coverage, it requires proactive steps to resolve the problem. Many policyholders search for how to reduce their payable insurance premiums on the Internet to be able to know how to enjoy lower rates. Although most of the advice on the Internet is rehashed content, they could be very helpful if you still adhere to them.
Let’s consider some of the advice out there on reducing business insurance premiums before moving on to more pragmatic approaches:
- Minimize insurance risks that can lead to losses.
- Implement security precautions in terms of fire hazards, theft and burglary, factory accidents, data breach, and personal injury among others.
- Evaluate your policy every year by reviewing changes that can qualify you for reduced premiums.
- Buy in bulk. You stand to obtain a significant discount if you buy all your insurance coverage from the same insurer.
- Settle your premium ahead of time. Paying for your insurance policy upfront demonstrates to your insurer that you are committed to your coverage, and this earns you a significant reduction for future payments.
- Increase your deductible to enjoy lower premiums. This is the out-of-pocket expenses you pay when a loss occurs, relieving your insurer of the burden of paying the entire claims.
- Categorize your workers appropriately. If you place most of your workers in a department where risks of injury are bound to occur frequently, you will be paying higher premiums on your business insurance. So put only the necessary people in that department to pay lower insurance costs. It is also good advice to notify your insurance agent immediately one or two employees leave your company.
Having established the commonest ways to reduce business insurance premiums, let’s check some deeper factors that can also help lower your rates.
Document all mishaps
You may consider a series of mishaps unrelated and isolated, but a deeper analysis may indicate that they are raising your insurance premiums. Most business organizations do not inform their insurance companies of minor incidents, but documenting them may reveal a critical trend that can be curtailed. With appropriate preventions put in place to arrest the trend, you may qualify for a reduced premium on your insurance policy.
Analyze the cause(s) of repetitive incidents
If you are in the transportation business and one of your drivers is always involved in a crash, then you may want to investigate the driver. If several unfortunate incidents occur in the same department or among a particular group of employees, then you should look deeper to get to the bottom of the problem. Doing this will prevent you from spending money on repetitive claims.
Tell your insurer about risk management strategies
It is advisable to pay insurance premiums for a policy, but you shouldn’t spend a dollar more than is necessary if you can help it. You must inform your insurance company or agent of all risk management strategies you have in place to mitigate conceivable losses – and to enable them reduce your premiums as a proactive customer.
Your insurer understands that the more you monitor all risks and manage them effectively, the lesser the chances of any unfortunate incidents and any subsequent claims; so they will be more favorable to offering you lower premiums on your business insurance policy.
Photo by Tima Miroshnichenko from Pexels
