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Ways to Reduce Your Business Insurance Costs

By Compuquotes Team on December 1st, 2008

Business Insurance

Depending on the number of policies and coverage limits that your small business has, you may find that insurance premiums are taking a pretty healthy bite out of your operating budget. Insurance premiums vary and often depend on a wide variety of factors. However, your business' insurance itself is based on the type of risks that you face. So, in order to reduce your insurance costs, your organization must take the necessary steps to reduce risks. While the ideas, methods, and programs described may need to be tailored to fit your organization, the basic concepts will correlate to a way to reduce a risk associated with a particular type of business or commercial insurance policy.

Auto Insurance is one of the first places to examine cutting insurance costs. First, you need to make sure all vehicles leased or owned by your organization are maintained properly. Second, do annual driving record checks on all employees who drive company vehicles, and if you don't currently have one, create a driving policy for your organization. Your business' driving policy should state the offenses that would eliminate and employee's ability to drive a company vehicle. Require that employees attend a defensive driving course or, have a defensive driving course consultant do a course for your organization periodically.

Workers compensation claims and health insurance is another place where a small business can reduce their costs. Implementing job safety programs and wellness incentives can be a cost effective way to cut these costs. For example, start a 'we walk together,' program. These programs challenge workers to use combined steps to walk across the country, using inexpensive step monitor to count the amount of steps they take in their everyday life. The program encourages employees to walk more which will facilitate weight loss. Studies have shown that over weight individuals have a higher cost of medical care than others. Other ideas could include a support group for employees trying to quit smoking or emailed nutritional updates and advice. Training programs for accident prone positions, new employees, and annual fitness tests could also reduce your costs.

Taking steps to reduce you risk of major property loss may help reduce your property insurance costs. Simple upgrades to your property will go a long way. So, adding things like smoke detectors, fire sprinklers, and bolt locks will decrease chances of major loss. Also, make sure that your business' valuables and equipment in your office is evaluated and appraised annually. This will ensure that you are not over-insuring equipment that has loss value due to age and use.

The costs associated with a generally liability policy is a little harder to reduce, due to its broad nature. However, if you don't currently have procedures in place for handling employee complaints for unfair termination, discrimination, and harassment, you should seriously consider it. Although it may not reduce your liability premium considerably, it couldn't hurt.

The simplest way to make sure you are getting the best deal is to review your policy annually and shop around. Do not let long business relationships and comfort prevent you from saving money where you can. Also review your risks to make sure you are not paying for coverage that you do not need.

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