Carrying contractors insurance is a necessity, but it does not have to be an expensive one. In these days where budgets are tight and people are looking to cut costs wherever they can, insurance premiums can be an excellent place to start “trimming the fat.”
Many policyholders are paying for coverage they do not need, or they have not taken the time to ensure that they are getting the best deal possible. Here are some aspects you can look at for opportunities to make your premiums cheaper:
Reconsidering your insurance carrier has the most potential for cost savings. Too many businesses simply renew their existing policy without shopping around first.
Insurance premiums are determined according to a formula that assesses risk not just for the policyholder, but also for the insurance company. Each company may apply their formula differently depending on the year or even month in question, given their current financial status.
Try to find a carrier who has a higher risk tolerance at the time you sign up for a new policy, which will mean lower premiums. Every time your policy is about to be due for renewal, evaluate the market again. Insurance coverage is a largely identical product across all carriers, so there is no reason to pay more to get the exact same thing.
Review Your Declarations and Policy Coverage
You could be paying for coverage that you do not need. For example, some construction businesses do not do hazardous work like roofing but still have coverage that reflects that practice. Other times, you may be covering employees that are not on your payroll anymore or equipment that you no longer own.
Take the time to review your policy to look for redundancies or unnecessary coverage, and update your policy any time you buy new assets or make major changes to your practices.
Increase Your Deductibles
Lower deductibles mean less money coming out of pocket for claims, but you have to pay for the privilege. Low or no deductible policies are often not worth the added cost.
Take a look at your various deductibles for liability, property damage, medical and other areas and consider whether you would be willing to make them a little higher. Insurance should be there for the big costs, not necessarily every single small claim you could make.
Enforce Safety Standards
Any time you file a claim, your premiums will be much more likely to go up. Avoid claims or a track record that could make you appear to be a high risk by keeping everyone safe on the job site. The more hazards you eliminate and risks you reduce, the better the chances of your premiums staying low.
Enforce safe dress codes, conduct guidelines and safety protocols. Something as simple as keeping the job site clean can help reduce the chances of injury. Train employees well and conduct meetings periodically to remind people of how to be safe on the job. Avoiding accidents and frequent claims will be the best way to keep insurance costs low.
A business owner’s policy and commercial insurance can often be combined. General liability coverage can be combined with commercial property, for instance, to make the rate cheaper than it would be when paid separately. You can often add endorsements to supplement the coverage you would have lost by combining.
With thorough evaluations of your existing policy and a workplace culture that emphasizes safety, your company is less likely to shoulder the burden of hefty coverage premiums. Always be sure to shop around and read policy documents carefully in order to prevent unnecessary expenses.