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| 8 Great Ways to Reduce Business Insurance Costs at Renewal |
The majority of commercial insurance clients have good claim histories. I wanted to provide some ideas to review with your insurance broker on ways to look for savings in most insurance plans for buildings or automobile fleets.
1. Your Deductible Limit for Physical Damage on your Structures or Buildings
If you’re like most clients, you have few or no claims. You may find savings in raising your standard $500 per occurrence deductible to $2500 or higher. Request that your agent provide a tiered renewal quote with your old deductible and two other higher deductibles limits to review.
2. Look into Obtaining a Deductible for General Liability Coverage
Many insureds have few or no liability claims. You can ask your agent to bring your renewal quote back to you with optional General Liability deductibles. The savings may be small looking at just one year, but from five to 10 years, you may save serious dollars.
3. Replacement Cost Limits on your Building
Ask to have your replacement cost calculated and provided to you. Some companies have compounded a hefty inflation amount year after year and you may have paid for an over inflated limit without a serious look. You might be over insured, which gives you no benefit to your budget.
Please remember that the cost to rebuild a building may be as much as 30 percent higher than from fresh dirt build up. There are industry accepted cost calculators that produce very comprehensible reports and as the policy owner, you are entitled to have a copy.
4. Rating Credits
Ask about credits for: Central Station Reporting Burglary Alarm, Camera Surveillance, Fire Sprinkler System, Steel or Brick Structure vs. a Wooden Frame Structure. Is part of your building considered “Green” or LEED certified? If you have completed any major renovations to the electrical system, plumbing system, roof or insulation, let your broker know about it.
There are some discretionary credits that a company underwriter can give if you are investing back into your property for capital improvements.
5. Policy Duplication of Coverage
Check your policy for duplication of coverage on business personal property. For example, some insurance companies include $20,000 in computer hardware. This is an extension limit in addition to your basic contents declared limit. So, deduct up to $20,000 in contents values if you have computer equipment in your contents declared limit. If you have more than the $20,000 in computer hardware, ask your broker to increase the Computer Hardware limit, which may be less expensive than just raising the general business personal property limit by the same amount. There may be other classes of business personal property in your extension endorsement. Read it, question the limits and save.
6. Multi Policy Discounts
Many insurance companies apply premium discounts for clients that have Cross Line accounts. Even if your other policies have different LLCs as named insureds for limited cross-entry liability, if you can show the underwriting department the same person or corporation controls many policies, there are discounts to be had.
7. Reducing the Financial Impact of Prior Claims
If you have a claim history, you’re most likely paying some additional premium for the prior losses. It is a wise risk management practice to review the prior losses and set forth operational policies to avoid or minimize the likelihood of repeating the same loss. Certified Risk Managers can be hired as consultants for specific areas and reports. Some insurance carriers will also provide risk management services free or nominal charges may apply. A fee schedule should be requested upfront.
If you can show your insurance company a sound loss prevention program, many carriers can then justify renewal credits. This is especially true with clients that have taken corrective measures in Fleet Automobile Loss Prevention. Such practices are driver awareness training, Motor Vehicle Driving Record Reports at least once a year on all drivers, GPS trackers in vehicles that report speeding to the home office and vehicle identification stickers with phone numbers to report reckless drivers. Vehicle inspection with scheduled preventative maintenance programs also can help your insurance rates.
8. Shop the Renewal
Now that you have taken all of the above steps and advice, you now need to do three more important tasks:
Step One: Have your broker provide the renewal application filled out and completed. You, the client and policy owner, should carefully read your renewal application and check it for errors or slanted information that may not be 100 percent accurate. Make all corrections before your broker sends the application to market.
Step Two: Request at least three quotes from your broker along with an A.M. Best rating report on the three insurance companies.
Step Three: Have a serious deadline for the renewal to be in your hands. Give your broker enough time to do the job and give yourself enough time to digest renewal alternatives and ask questions.
9. Partner with your Broker
You have been given eight great concepts in managing your renewal insurance costs. The next step is to foster a caring and trusting relationship with your insurance professional. Discuss your ideas, future growth, products, and processes with your broker. Get your broker on board as if he were on the Board. The more your insurance professional is included and excited, the better value will come to your company.
1. Your Deductible Limit for Physical Damage on your Structures or Buildings
If you’re like most clients, you have few or no claims. You may find savings in raising your standard $500 per occurrence deductible to $2500 or higher. Request that your agent provide a tiered renewal quote with your old deductible and two other higher deductibles limits to review.
2. Look into Obtaining a Deductible for General Liability Coverage
Many insureds have few or no liability claims. You can ask your agent to bring your renewal quote back to you with optional General Liability deductibles. The savings may be small looking at just one year, but from five to 10 years, you may save serious dollars.
3. Replacement Cost Limits on your Building
Ask to have your replacement cost calculated and provided to you. Some companies have compounded a hefty inflation amount year after year and you may have paid for an over inflated limit without a serious look. You might be over insured, which gives you no benefit to your budget.
Please remember that the cost to rebuild a building may be as much as 30 percent higher than from fresh dirt build up. There are industry accepted cost calculators that produce very comprehensible reports and as the policy owner, you are entitled to have a copy.
4. Rating Credits
Ask about credits for: Central Station Reporting Burglary Alarm, Camera Surveillance, Fire Sprinkler System, Steel or Brick Structure vs. a Wooden Frame Structure. Is part of your building considered “Green” or LEED certified? If you have completed any major renovations to the electrical system, plumbing system, roof or insulation, let your broker know about it.
There are some discretionary credits that a company underwriter can give if you are investing back into your property for capital improvements.
5. Policy Duplication of Coverage
Check your policy for duplication of coverage on business personal property. For example, some insurance companies include $20,000 in computer hardware. This is an extension limit in addition to your basic contents declared limit. So, deduct up to $20,000 in contents values if you have computer equipment in your contents declared limit. If you have more than the $20,000 in computer hardware, ask your broker to increase the Computer Hardware limit, which may be less expensive than just raising the general business personal property limit by the same amount. There may be other classes of business personal property in your extension endorsement. Read it, question the limits and save.
6. Multi Policy Discounts
Many insurance companies apply premium discounts for clients that have Cross Line accounts. Even if your other policies have different LLCs as named insureds for limited cross-entry liability, if you can show the underwriting department the same person or corporation controls many policies, there are discounts to be had.
7. Reducing the Financial Impact of Prior Claims
If you have a claim history, you’re most likely paying some additional premium for the prior losses. It is a wise risk management practice to review the prior losses and set forth operational policies to avoid or minimize the likelihood of repeating the same loss. Certified Risk Managers can be hired as consultants for specific areas and reports. Some insurance carriers will also provide risk management services free or nominal charges may apply. A fee schedule should be requested upfront.
If you can show your insurance company a sound loss prevention program, many carriers can then justify renewal credits. This is especially true with clients that have taken corrective measures in Fleet Automobile Loss Prevention. Such practices are driver awareness training, Motor Vehicle Driving Record Reports at least once a year on all drivers, GPS trackers in vehicles that report speeding to the home office and vehicle identification stickers with phone numbers to report reckless drivers. Vehicle inspection with scheduled preventative maintenance programs also can help your insurance rates.
8. Shop the Renewal
Now that you have taken all of the above steps and advice, you now need to do three more important tasks:
Step One: Have your broker provide the renewal application filled out and completed. You, the client and policy owner, should carefully read your renewal application and check it for errors or slanted information that may not be 100 percent accurate. Make all corrections before your broker sends the application to market.
Step Two: Request at least three quotes from your broker along with an A.M. Best rating report on the three insurance companies.
Step Three: Have a serious deadline for the renewal to be in your hands. Give your broker enough time to do the job and give yourself enough time to digest renewal alternatives and ask questions.
9. Partner with your Broker
You have been given eight great concepts in managing your renewal insurance costs. The next step is to foster a caring and trusting relationship with your insurance professional. Discuss your ideas, future growth, products, and processes with your broker. Get your broker on board as if he were on the Board. The more your insurance professional is included and excited, the better value will come to your company.
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