What can businesses do to save money on insurance?
Here are some areas to address to potentially save your company money at any time during the policy term:
- Identify potential hazards and transfer, eliminate or manage the exposures.
- Determine what has created losses; analyze this data.
- Establish a corporate safety culture by implementing a program to reduce or eliminate future losses.
By taking a look at each of these areas, you will discover what coverage issues are important to your business. Also, you’ll learn what you are doing well and not so well in terms of reducing risk, which ultimately turns into cost. The real benefit here is that you will develop a better understanding of your risks.
What should be reviewed or considered when transferring risk to an insurance carrier?
For property insurance coverage:
- Are there property coverage areas whereby you can self-insure certain exposures or coverages?
- Review the economics of utilizing higher deductibles.
- Make sure you are using proper values backed up by accurate property appraisals, based on proper square footage.
- Do you have the proper construction classification assigned to properties?
- Do you have the proper fire protection equipment classification for each property?
For general liability coverage:
- Review certificate of insurance retention procedure relative to risk transfer.
- Can you utilize property damage deductibles? What about other deductibles?
- Review your rating basis — payroll versus sales rating basis.
- What about the composite rating?
- Review classifications and exposures.
For automobile-related coverage:
- Establish a fleet safety program and/or defensive driver programs.
- Utilize higher deductibles.
- Self-insure collision and other than collision — it’s all about economics.
- Review vehicle classifications for changes and/or accuracy.
- Review rental car policy, including all non-owned vehicles.
For workers compensation coverage:
- Review experience modification.
- Evaluate use of standard premium, retro basis versus payroll basis.
- Review classifications and codes, and review payroll per classification.
- Dividend programs, retrospective and retention programs.
Do your due diligence and have your program reviewed thoroughly. Reviewing your business risks and managing insurance to mitigate losses is a guarantee to save your business money, one way or the other.
Karen Miller is the president of Royal Marine Insurance Group. Reach her at (305) 477-3755 or [email protected].