Friday, November 12, 2010
How to lower your insurance costs
Insurance is one of those dead money costs that we all in business have to have, but in many cases consider it as dead money as we rarely get an economic return on it. Cost containment and control are essential in these tough economic times, so a saving on any overhead is welcome. Here are some practical tips that we have used with clients to save them money on their insurance costs. In cases we have helped achieve 25% discounts on individual policies.
Increase your excess
Raising the excess on your insurance policies usually lowers your premiums. This can lead to savings of up to 10% on policies.
Bundle your Policies
Even though your policies may fall due for renewal at different times of the year, bundle all your policies and ask insurance companies / agents to quote you for all of the business.
Use a Broker
Work with an Insurance Broker to help you figure out what coverage you need and get it at a competitive price can be a good option, if you are unsure of the precise cover you need. An independent agent or broker is paid by commission, but will shop around to find you the right coverage at the right price.
Risk management minimises your insurance claims and brings your premiums down. Implement procedures to make sure that you aren’t taking on risky employees—for example, by checking the driving record of anyone who will drive for you. Many companies offer lower premiums or discounts to policyholders who take certain safety precautions. Installing smoke detectors or a security system is a couple of steps you can take that may get you a lower-priced policy. Always make sure that your business is adhering to relevant legislation such as health and safety and employee legislation as in some cases insurance can be invalid if you do not.
Levels of Cover
Evaluate all your insurance policies for their risk/benefit, and decide which ones you think you will really need. Don't over insure. Do you really need cover for old and low value office equipment and computers?
Consider dropping collision cover on older vehicles. If the car is only worth €1,500, why pay €200 per year extra for collision cover.
Prioritise your Greatest Risks
Once you’ve dealt with required coverage, spend your money where you need it the most. If you face a serious risk of a loss that could wipe you out, put your insurance cover there first.
Don’t Duplicate Coverage
A business can have so many policies in place that you may find some things being insured more than once. For example if you have only a few relatively inexpensive pieces of business equipment, your existing property coverage may be adequate. Or, you may be able to purchase an inexpensive endorsement to increase your coverage. Review all your policies carefully, or have your broker do this. Eliminating dual coverage should save your money.
Group Insurance Schemes
If you belong to a trade organisation, professional group, or other business association, you may be eligible for special rates on certain types of insurance.
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