7 Ways to Control Costs at Your Next Commercial Insurance Renewal
Finding ways to save money is on every business owners mind these days. With insurance costs rising, you may be wondering if there are things you can do to control them. Here are some tips to help you reduce your commercial insurance premiums when it’s time to renew.
1. Get Expert Help
Work with a broker who is focused on your industry and takes the time to truly understand your business, its operations and specific exposures. They have the relationships and access to the insurance carriers, enabling them to shop for you to find the right insurance for your needs, including negotiating on your behalf. Doing it on your own may seem like it will save you money, but efficiently navigating the insurance market takes an expert.
2. Review Coverage Annually
Take time to evaluate what coverage you currently have to determine if it is appropriate based on your business situation. Not only do you want to make sure existing exposures are covered but also that you aren’t paying for coverage you don’t need. Consider what changes have been made to your business in the last year and how those impact your coverage needs. For instance, did you add or reduce staff, vehicle fleet or equipment? Likewise, you want to make sure you aren’t duplicating coverage in other policies. Take time to read the fine print so you know what is included or excluded. Make sure you are comfortable with and clear on the terms. If you don’t understand the policy, ask your broker for clarification. A careful review and comprehensive conversation with your broker will allow you to right-size your coverage.
3. Pay Higher Deductibles or Lower Limits
The deductible is the amount you are responsible for paying out of pocket prior to your insurance paying when you file a claim. So if you assume more risk in the form of a higher deductible, your premium should decrease. When considering this option, determine what amount your business can afford to pay in the event that you do need to file a claim.
4. Properly Classify Employees
While specific to workers’ compensation insurance, correct employee classifications are important in securing the right coverage. If employees are incorrectly placed in a category that may suffer higher injuries, it could result in more expensive workers’ compensation premiums.
5. Implement Risk Controls
Strong risk controls show that your company is serious about managing risk. Take advantage of risk control programs provided by your insurer. Strategies such as employee training, a comprehensive safety program and use of personal protective equipment focus on preventing injuries and accidents. This in turn results in fewer losses, which can lower both workers' compensation and general liability premiums.
6. Take Advantage of Credits
Insurers offer various credits that can reduce the cost of insurance. You could qualify for training and safety program credits or even a loyalty credit if you’ve been with your insurance carrier for a while. Work with your broker to explore more potential savings in the form of a credit.
7. Explore Alternative Funding
In today’s market where coverage is difficult to obtain or afford, alternative funding may be an option to consider. Some alternative risk transfer solutions can provide advantages in insurance savings, wealth transfer and risk management. If your organization is in strong financial health with a good loss history, you may be a good candidate for alternative funding.
While cost shouldn’t be the main driver in determining your insurance coverage, premiums are rising, so following these tips should help you obtain the coverage you need at the best price. A broker with expertise in your industry can guide you through the process and negotiate on your behalf to secure the best risk management solution for your money. For questions about your insurance renewal program, contact your local insurance and risk management professional or a member of our team.