Your insurance company provides benefits that most business owners don’t utilize, many of which could save you money on your property and casualty insurance premiums. Because these services are bundled into the cost of your policy, if you’re not taking advantage of them, you may actually be costing yourself money, says Craig Hassinger, president of SeibertKeck.
“Oftentimes, business owners don’t understand that there are valuable resources available to them that are built into the cost of the premium,” Hassinger says. “Because those costs cannot be carved out of the premium dollars, if you don’t use those services, you lose them.”
Smart Business spoke with Hassinger about services you can take advantage of for no additional cost, and how those services could actually save you money on insurance.
Why are so many business owners unaware of the services available to them from their insurance company?
In some cases, the agency is not taking the time to explain it properly. In others, the customer doesn’t have enough interest in the insurance-buying process to take advantage of it. Property and casualty premiums can be significantly less than health care costs, so some business owners may only want to meet with the broker once a year and spend a limited amount of time reviewing their property and casualty insurance program. But they are walking away from some real value-added services that insurance companies offer through their independent agent.
What kinds of services are often overlooked?
The majority of companies in the insurance industry offer loss control services to their customers. Loss control engineers will visit your business, meet with you and get to know your company. As a result, they can provide you with a list of services they can offer, such as life safety seminars, employee seminars and risk management services, all of which can help control your insurance costs, or even drive those costs down.
Employers should also take advantage of the insurance company’s website, which, 24 hours a day, seven days a week, for the entire term of the policy, provides access to information on topics such as safety, HR and other important information they may be paying for through an outside consultant.
How can a five-year claims report benefit a business?
Employers should ask for a five-year claim report from their independent agent. Look at your claims and identify any trends, any problems that are driving costs or that may position you to negotiate a lower premium. If your loss experience is better than average, then your premiums should be better than average.
Though insurance companies are in business to make a profit, it is possible to negotiate with them for a discount. However, too many employers don’t know that this information is available to them and that they can use it to have an impact on their premiums.
What other steps can businesses take to save money on insurance?
One simple solution is to review your deductibles and retentions and adjust those based on your risk appetite. The higher your retention or deductible, the lower the premium you are going to pay and the more exposure you accept as a company. And the more risk you are taking on, the more you will pay out for a claim.
It’s important to know what your deductibles are and what your return on investment is by adjusting these deductibles.
How can risk transfer agreements impact your costs?
You want to make certain subcontractors and vendors have the appropriate insurance coverage. Contractors should transfer risk to these groups if they are performing work on your behalf. Certificates of insurance with additional insured coverage can allow you to transfer the exposure to risk from your organization to these subcontractors and vendors.
With risk transfer agreements, you are transferring that risk to your subcontractors and vendors, which will reduce your claims activities and, ultimately, control your insurance costs. It’s a simple process, and that’s where you independent agent can bring value by assisting you in the risk transfer process.
How else can your relationship with your independent agent provide benefits?
Your independent agent should be more than just a buying agent for purchasing the insurance product. That person should bring a value service platform. And that is an educational process to understand what services are available to you and what reports are available to you. The independent agent should also be familiar with market conditions and be able to share with you the rate expectation for future years.
Also, don’t just renew the policy each year and forget about it until next year. It’s recommended that business owners meet with their independent agent in some capacity at least twice a year. The bigger the organization, the more often those meetings should take place, because the needs are greater.
Your relationship with your independent agent should include an ongoing service plan to review your entire program on a regular basis; it should not be a once-a-year project. You should be working with your independent agent year-round to help control costs and potentially reduce them, and to manage your losses. The relationship should be that of a trusted adviser, such as that with an attorney or an accountant. The independent agent should be part of that trusted adviser group, providing solid recommendations on how to manage your risks and control insurance costs.
Craig Hassinger is president of SeibertKeck. Reach him at (330) 865-6237 or [email protected].
