In today’s business climate successful businesses have to take advantage of every way they can to lower expenses. Commercial insurance is one of the largest fixed costs most businesses incur. In most states workers’ compensation and general liability are required by law for most businesses. Many business owners look at these policies as a tax. That they are not going to change much from year to year and there is not much they can do to lower what they pay. This is far from the truth. There are many ways businesses can lower what they pay in premium for commercial insurance. Here are five easy steps that any business can take to lower what they pay for commercial insurance.
- Partner with an independent insurance agent whom you trust
Partnering with an independent insurance agent whom you trust is one of the best things a business owner can do to properly protect their most prized investment. Especially an agent who partners with many insurance providers. This allows them the ability to shop your policy around each year in order to get you the best workers compensation insurance quote. If you partner with an agency who only partners with one carrier or a select few carriers than you are never sure your premium is competitive. If you want to find out if other carriers are offering lower premium than your only choice is to shop the policy yourself or partner with more than one agent. If an agent has a partnership with many different
- Shop Around your policy
If you partner with an agent who already partners with many carriers, they are probably doing this already each year. If you partner with a carrier who does not have many carriers, they represent than you should shop around your policy periodically. You should be careful of switching every year just for a lower price. This is because when your business does have a claim it will be much more likely to be dropped by your carrier if you do not have a long term relationship with your carrier. If you have been with a carrier for a number of years and your agent has a strong relationship with that carrier, they can negotiate on your behalf to show the carrier that your claim is more of an outlier than a sign of how your business operates. If you change carriers frequently the underwriter is much less likely to continue to take on your risk. If you are dropped from your carrier, you will have to purchase coverage on the open market. If you are not able to find coverage from another carrier than for many coverages, you will be forced to purchase coverage from the state provider which is much more expensive.
- Safety programs
Having effective safety programs are immensely important for your small business. It is important not just in relation to your insurance policy, but because it is the right thing to do. Safety programs start during the hiring process. If new employees know their well-being is important to you as a business owner, they will be much more likely to take safety seriously. When employees know that you care about them and their well-being they will be likely to work that much harder for you. When the business is operating safely there will be less injuries to both your employees and to third parties who come in to contact with your business. When less injuries occur you will have less claims to make with your insurance carrier. This is the exact type of business that carriers want to insure and they are more likely to dig deep with credits and discounts when you are negotiating your premium.
- Monitor your Experience Modification Rating
Having a strong relationship with your insurance agent is valuable. It really comes in handy when you are attempting go to buy workers compensation insurance. This is because the biggest factor determining what you pay in premium is your experience modification rating. Keeping this rating low has the largest impact on premium. The main thing a business can do to keep this rating low is to limit the cost of all claims. That does not mean to never report a claim, but to keep the frequency and severity of your claims relatively low. You still want to report claims. You never want to create an atmosphere where employees and managers want to hide injures that do occur. Furthermore, carriers monitor your claims and can offer advice when they see patterns forming. They monitor many businesses within your industry all across the country.
- Hire the right people and train them well
Who you pick to be a part of your organization can go a long way towards the outcomes of your company. If you operate in an industry where safety is of the utmost importance than questions about how a candidate values safety need to be a part of the hiring process. Just like you should hire for attitude and train for skill, you should hire people that know from day one that safety is an important part of their job function. If you are mentioning safety during the hiring process and then reinforce it during the new hire training the message will be ingrained in the culture of your organization. If you provide the proper equipment and you take the time to train the employees on its proper use it will lower the frequency and severity of injuries that occur on the job. This will directly affect the claims your business experiences. Over time, this will drastically change your experience modification rating; which will in turn lower what you pay in premium.
Author Bio: Mitchell Sharp is a Marketing Associate for Workers Compensation Shop.com Mitchell has extensive expertise in workers’ compensation and cyber liability insurance. He would like to use his knowledge of commercial insurance and digital media to benefit the small business community.
