10 Steps to Reducing Your Insurance Premiums

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Image courtesy of [Katrina Charmatz] / Getty Images.

For many companies, insurance premiums are a major cost of doing business. If you can reduce the cost of insurance, you will have more money to invest in your business. Here are ten steps you can take to lower your insurance premiums. These tasks should be performed annually, before your policies renew. 

Update Your Insurance File

Start your review by looking at your insurance file. Your file should contain copies of all your insurance policies so that they are readily available when you need them.

You should keep copies of claims forms for each policy. Be sure to maintain a duplicate insurance file at an off-site location, such as a safe deposit box at your bank. You will need your policies and claims forms if the original file is destroyed by a fire or other peril.

Review Your Auto and Equipment Schedules 

Review the list of covered autos on your commercial auto policy. Look at the equipment schedule on your  commercial property or inland marine policy. Does your business still own the vehicles or equipment listed? If the answer is no, ask your agent or broker, or your insurer to remove those items.

Review Your List of Employees

Review the list of vehicle drivers provided to your auto insurer. Are the drivers still your employees? Your insurer may be charging a higher rate for a problem driver that is no longer your employee. Moreover, a coverage you purchased for a specific employee, such as Drive-Other Car Coverage, will not be needed if that worker has left your company.

Look for Unneeded or Overlapping Coverages

Your policies may cover risks that no longer exist. An example is a building you sold several months ago that is still scheduled on your property policy. Some coverages may overlap or duplicate each other. You don't need to insure hired autos and non-owned autos under your general liability policy if those autos are covered by your commercial auto policy.

Ask you agent for assistance if you need help identifying overlapping or duplicate coverages.

Adopt and Maintain a Consistent Safety Plan

A safety plan can help you eliminate hazards that can lead to accidents, injuries and lawsuits. Such a plan will be effective only if it is enforced consistently. Review your plan annually and analyze its results. A good safety program can help you reduce losses and lower your workers compensation and general liability premiums. If you need help establishing a safety plan, consult your insurer. Many insurers offer risk control services to their policyholders.

Classify Your Workers Correctly

The rates charged for workers compensation coverage may vary widely from one classification to another. Thus, it is important to ensure your workers are classified correctly. If you employ sales workers who are misclassified as production workers, your premium may be unnecessarily high.

Discuss Your Premiums

Discuss your rates and premiums with your agent or broker. He or she may offer options for reducing the cost of your insurance.

You agent may suggest increasing your deductibles, switching insurers or utilizing self-insurance.

Be Active in Trade or Professional Organizations

Some trade or professional organizations offer insurance coverage to members through an affiliation with an insurance company. This coverage may be cheaper than insurance you purchase on your own.

Adopt Health Specific Changes at Your Work Place

Health and workers' compensation premiums will be lower if your work force is healthy. Set a good example for your workers. If you smoke, quit. Adopt a no smoking policy at your company. Encourage your workers to exercise by organizing lunchtime walks or yoga classes. Consider a partial reimbursement of a health club membership as an employee benefit.

Train Your Workers

Workers need training to ensure they perform their jobs properly. Well-trained workers are less likely to sustain on-the-job injuries or injure someone else. Some types of training may result in premium discounts. For example, a defensive driving program you provide to your employee drivers may reduce your commercial auto premium. Ask your insurer what types of training will reduce your insurance costs.

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