Five Ways to Save When Purchasing Commercial Insurance

When opening or operating a small business, the owners of those businesses have many responsibilities. One responsibility they may not be very fond of is purchasing commercial insurance. In most states General Liability and Workers’ Compensation Insurance are required by law. General Liability will cover your business when injuries commercial insuranceoccur on your property, to customers and third parties who might be on the property. Workers’ Compensation will cover your business in the event of an injury occurring to one of your employees. Workers Comp will provide medical costs and some lost wages while your employee is not able to work. These two coverages are the bare minimum protection and most businesses need additional coverages. Determining how much risk your business actually faces and how much risk you are comfortable with is a decision that should be made with the guidance of an insurance professional with whom you trust. Here are five tips small business owners can use to save when purchasing commercial insurance.

Safety Programs

A well-documented safety programs is crucial for many reasons.  At the top of that list of reasons is that it prevents workplace injuries. The safety of your workforce should always be at the heart of any successful business plan. Having a safety plan in place can lower the frequency and severity of injuries that occur in the work place.  When the inevitable injury does occur, the safety plan is an asset your agent can use to show the carrier the claim is more of an outlier and not a sign of how the business operates.  Good safety programs do not have to be extensive or time intensive. Extensive training should take place during the initial hiring process and weekly or monthly toolbox talks can suffice moving forward. Any employees who drive as a part of their normal job duties should have their driving record pulled yearly. A return to work program can help get your injured employees back on the job quicker and limit the severity of any claim. Having a well-documented safety programs in place along with a return to work program can help your business get a discount on premium up front and prevent your business from being dropped by a carrier when you have an accident.

Develop an effective Return-to-Work Program

An effective Return-to-Work Program can work hand in hand with your safety program to limit the severity of a claim when your business inevitably has an injured worker. The quicker an injured employee gets back on the job and in the routine of going to work, the more likely they are to return to regular employment. Humans are creatures of habit and when an employee is injured and not able to work, they are forced to get out of their daily routine.  The longer the injured employee stays off the job the more likely they are to develop new routines not associated with their work life. This can extend the amount of time they spend away from work and increase the severity of the claim. For this reason, the quicker you can get an injured worker back on the job in any capacity, the more likely they are to return to full time work. This will prevent your workers’ compensation insurance premium from increasing from having too many to too severe claims at your business.

Shop Around Your Policy
It is important to shop our policy to as many carriers as possible.  If for no other reason than to ensure your carrier is giving you a competitive price on premium. Partnering with an independent insurance agent who has a relationship with many carriers is an easy way to ensure you are getting a fair price. At the same time, switching carriers every year based solely on price is not a wise decision. This is especially important when you have to file a claim. If this is your first year with a particular carrier, they are much more likely to raise your rate or drop your business from coverage altogether. If you have been a customer for multiple years, your agent can negotiate on your behalf to not have these things happen. If you have a well-documented safety program and an effective return-to-work program in place your agent can use those as documentation that your business is not likely to have more claims in the future. This can be extremely beneficial the next time your business is looking for a general liability quote.

Make sure your business is classified properly for insurance purposes

Many businesses are not classified in the proper NCCI Classification Code.  Most industries have more than one classification code and it is your responsibility as a business owner to ensure you are classified properly. Your insurance agent is in the business of analyzing risk. If you do not give them enough information about your business, it is in his best interest to assume more risk. This will cost you more in premium if you are properly classified. Most of these discrepancies get fixed in the end of term audit, but even if you get a refund it still means you have had unnecessary funds tied up in premium. That is cash-flow that could have been used on other business needs. Taking a few extra minutes to speak long and honestly with your agent can make sure your business is classified properly.

Bundle Your Policies

Bundling your policies is a great way for several reasons. When a claim occurs this is the best way to avoid having a gap in coverage. This can help you to make sure you know what exactly is and is not covered associated with your business. When you purchase separate policies, at best it can delay processing of your claim while insurance carriers determine who is actually liable for the claim. In a worst case scenario, it can cause your claim to not be covered at all. Bundling coverages can also save you on premium. Insurance carriers are more likely to dig deeper for better discounts and credits if they know they are going to get multiple lines of your business. Most carriers have business owners packages already set up for several different industries. This can help you insure your business to the fullest at the best rates possible.

About Mitchel Sharp

Mitchell Sharp is a Marketing Associate for General Liability Shop. Mitchell has extensive expertise in workers’ compensation and cyber liability insurance. He would like to use his knowledge of commercial insurance and digital media to benefit the small business community.