Ready for some straight tips on cutting your business insurance costs? Here they are -
1) When giving your estimated sales for insurance purposes keep it as real as possible. If you want a loan it is fine to inflate a bit, but insurance rates are based on those figures so if you don’t reach them and the policy is a non-auditable policy you will pay the premium regardless of if you reach those sales figures. A good agent will ask at renewal for updated information but many forget and you reap the benefit of the premium being lower. There is no negative or penalty for underestimating on a non-auditable policy – but they do require that you not falsify your information. So, be close but don’t embellish, not even a bit.
2) If you own your building and you have heavy, expensive equipment you can add it to your building on a separate endorsement and save money. The equipment should cost at least $50,000 and not be movable as you lose theft coverage but for many businesses they are not concerned with theft of a one ton piece of equipment. The rate is less expensive and most agents never tell you this is available to you.
3) Did you know that you can negotiate a flat fee commission with your agent? Normally an agent will receive a commission of 10%-15% of the premium on workers’ compensation and 15%-25% of the premium on general liability and property coverage. You can ask your agent what commission they are making – some may tell you some may not. Then make an offer on the pricing – for example your workers’ compensation premium is $100,000 the agent is getting 10% commission – so you can make an offer that the premium be lowered to $90,000 and you will pay the agent a flat fee commission of $5,000. Legally an agent can not make a commission and a fee unless it is disclosed up front. The reason this is good sometimes is that the agent’s commission is not tied to the price of your insurance. Remember the more you pay the more the agent makes – so next year you keep the fee the same and decide what fee is reasonable for the services of the agent. Some agents will not want this. Some larger clients get even more sophisticated on this and tie the fee to performance such as lowering the experience modifier, via closing claims and assisting the client to implement safety programs.
4) Obtain a business insurance consultant to work with you on your insurance program. It saves you time and money.
