The increasing cost of business is forcing business owners to get very creative in the way in which they go about saving money on their business expenses. With a slowly recovering economy, commercial real estate is becoming much more expensive. The cost of employee health insurance is rising as a result of the affordable care act. One of the largest expenses most businesses incur, is commercial insurance, but there are many ways small businesses can save significantly when purchasing and renewing commercial insurance policies. Here are 6 things business owners can do to save on commercial insurance policies.
Understand The Types Of Commercial Insurance
There are seven types of commercial insurance that every business owner must know. This will help you later when it comes time to bundle policies or participate in group buying. It will also help you when you just need to select which policies are necessary for your business. Remember these seven types of commercial insurance:
- Commercial Property Insurance
- Commercial Liability Insurance
- Commercial Errors and Omissions Insurance
- Malpractice Insurance/Professional Liability Insurance
- Commercial Automobile Insurance
- Directors and Officers Liability Insurance
- Workers Compensation Insurance
These seven types of insurance coverage are the types of policies you are going to need to consider. Remember these when trying to save money on commercial insurance policies.
Extra Attention On Hiring Process
Hiring and training people might be the biggest expense a small business takes on. Paying extra special attention to the hiring process can save your business on this expense immensely. Frequently it is more important to find the best fit as much or more so than to find the most qualified applicant. Many times a person who is a little less educated or has just a little less experience might be a better fit for a number of reasons. For this reason, it is important to meet with a small group of advisors within your organization and determine what it is your business values in new hires. It is also a good idea to have more than one person interview the candidate and include the people they will be working alongside in the process.
Well-Documented Safety Program
No matter what industry you operate in, there is always a need for every business to have a successful safety program in place. The program is especially important in relation to your workers compensation insurance policy. The safety program should be well thought out and ingrained into the culture of your organization. The program should start with your new hire onboarding process and it should continue throughout the entire time an employee is a part of your organization. There should be regular meetings held with clear goals. Have certain aspects of the business that could be dangerous brought to the employee’s attention. Ask the employees for their feedback. These meetings or training sessions do not have to be time consuming. It can be as little as a 15-minute huddle twice a month, but the more regular they are the more your employees will know that you value their safety.
An effective return to work program should work hand in hand with your safety programs. In an ideal world the safety program will work and you will never have to have an employee miss work because of an injury. Unfortunately, we do not live in an ideal world. For that reason, it is important for your business to have a plan in place for how you are going to get injured employees back involved with your organization as fast as possible after an injury. This is because people are creatures of habit. The longer a person stays away from the job while they are injured the more likely they are to develop new habits. The quicker you can get them back involved in the business, in any form or fashion, the more likely they are to return to permanent work.
Independent Insurance Agent
Like many things in life, insurance agents are not created equal. Some agents work for only one or a select few carriers. If you partner with one of these carriers, they are only able to shop your policy around to the few carriers that they partner with. This can cause you to get less comprehensive coverage and to pay far more in premium than may be necessary. This is especially dangerous if you own an international business. Partnering with an insurance agent who can quote your policy to 10 or more carriers can save you a lot of time. Once you have found an independent agent who can shop the policy for you. This can allow the insurance professional to do the negotiating on your behalf and allow you to do what you do best, which is run your business.
Workers’ Compensation Coverage
Many industries have more than one classification code for workers’ compensation coverage. For this reason, it is important to take a few extra minutes to speak with your insurance agent about what exactly your business does and does not do on a daily basis. The agent and the carrier are going to investigate this on your website and social media branding accounts so it is important that the pictures and information on these platforms accurately represent what you do as a business. Misclassifications are usually found during a post-term audit, but it is always best to be properly classified to begin with. This can prevent owing additional premium at the end of the term or prevent tying up cash in unnecessary premium all year long.
Bundling Coverage Packages
If you are purchasing more than one policy, consider purchasing most or all of your policies with one insurance carrier. This is a suggestion you will frequently hear at any small business conference you attend. The insurance carrier is much more likely to give you larger credits and deeper discounts if they know they are selling you several products as opposed to just one. Purchasing from one carrier can also prevent having gaps in coverage. When you do have a claim and you have policies from several different carriers, at best it will delay the time to get your claim covered. In many situations it can result in a claim not being covered at all. Bundling your coverage can help prevent this from happening to your business.