Saving money on your business insurance costs does not mean leaving gaps of protection. Keep your business and employees secure while saving yourself a few cents along is good business.
Cutting Costs on Your Commercial Insurance
Saving money on your business insurance costs does not mean leaving gaps of protection. Keep your business and employees secure while saving yourself a few cents along is good business.
General Liability Insurance
The first place to start is with a review of your general liability.
Your general liability is most often rated on your gross receipts or your payroll. If you have recently went through a seasonal layoff or your business is just down, call your insurance agent and say, my gross receipts have been reduced and I’ve had to lay some people off. My payroll is going to be less, and you can adjust your payroll down and your receipts down. Then when business picks back up or the season begins again, another simple call can get you the coverage you need once again. Just don’t forget to call when that time comes.
Commercial Auto Insurance
The second place to look is at your vehicles. If you have a small fleet of vehicles and typically run with five or six, and you’ve laid some people off and you’re running with two or three vehicles you can take those surplus vehicles off. Park them, make sure no one drives them while they’re parked and you can take them off the policy. Then call back once you need to use them again and they can easily be added back.
Protect What Matters Most in Your Business
Don’t leave your insurance needs to chance. Learn more about what to look for when shopping for contractors insurance.
Workers Compensation
Then evaluate your Workers Compensation Plan, which is based on payroll. If your payroll is down, you can call up your agent and say, my payroll is down, let’s take the workers’ comp down and we can reduce the payroll to what you anticipate it being. Now, with both general liability and workers’ comp there’s always an audit, which means that at the end of the year they can come back and say, you said it would be X but it’s Y, and you either will owe us money or we’ll owe you money. So just be aware that can happen. Even with the general liability and workers’ comp, if you do nothing, you could possibly get money back, but that doesn’t help you with your bills right now.
If you’re a little proactive and you know that your payroll is down, just giving a call to your agent or looking for a new agent, calling them or calling us, you might be able to save a little bit of money right now.
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Save Money on Deductibles
Another area where you can save some money is deductibles. If you have on your property insurance, and this is probably the only place you can move on property, if you have a $1,000 deductible, look at a $2,500 or a $5,000 deductible. Be aware that when you’re looking at higher deductibles on property, there are diminishing returns. Let’s say if you go from a $500 to a $1,000 deductible and they save you $200, it’s going to take two and a half years for you to get that $500 back. If there’s a claim in reduced premiums, if you go from a $1,000 deductible to a $2,500 deductible and they give you the same $200, all of a sudden that’s going to take seven and a half years to get that $1,500 back.
Maybe that’s not enough. I’ve seen situations where we’ve gone from a $1,000 to a $2,500 deductible and the difference in premium is $25. You don’t do that. It’s just not enough reduction in premium to justify taking the higher deductible. Look at the same thing with your auto. If you’re running with a really low comp and collision deductible, we still have people out there with $100 deductibles on their comprehensive and $500 on collision, go to $1,000 and that’ll save you some money as well.
Find Where You Can Save on Insurance
Insurance is complicated and you need to keep an continual eye on it. That’s why you need to rely on somebody who can talk to you about it and say, where can I cut? Where can I save? And be creative with doing it without totally gutting your insurance.
Bancorp’s insurance experts are available to provide you with a free review and consultation. Contact Us – Bancorp Insurance Call 800-452-6826
Disclaimer: This content is provided for general information purposes and is not intended to be used in place of consultation with our agents.
