Controlling Insurance Costs
April 24, 2009
This article provided courtesy of Federated Mutual Insurance Company.
All things being equal, two businesses with virtually the same operation may pay the same premium for property, liability, and workers compensation insurance—until one makes an insurance claim. That claim could result in higher insurance premiums.
Seven Ways to Keep Insurance Costs Under Control
These guidelines can help you keep your insurance costs under control:
1. Find a trusted insurance advisor.
Select an insurance advisor who really understands your industry and your business and takes the time to properly design an insurance program.
2. Align yourself with an insurance company that specializes in your industry.
Insurance carriers may enter into a market for short-term financial gain. What happens if their venture falters and they pull out? Can you easily find another carrier? At what cost? Insurance companies with a history of commitment to your industry and your association typically are in it for the long haul. Loyalty to your industry does matter!
3. Get serious about safety!
Implement appropriate risk management policies and practices. Introduce an effective safety program to help prevent losses. Look for an insurance provider that makes safety and loss prevention resources available and is able to help with implementation.
4. Review claims.
Review your claims at least annually. Confirm accuracy and discuss any open claims or reserves. Implement practices that help prevent those claims from reoccurring.
5. Be prepared.
Review coverages and services with your insurance representative at least two to three months before renewal to see if they still meet your needs.
6. Don’t buy on price alone!
While price is a component, other features—coverages, safety assistance, claims services—can help contribute to significant savings over time. Lower “front-end” premiums may result in more “back-end” costs with claims that are either not covered or have limitations.
7. Consider self-insuring or partially self-insuring some risks.
To save costs and improve your loss record, consider increasing deductibles on your policies, implementing a well-designed self-insurance program, or installing a Workers Compensation Retrospective plan.
This article reprinted with permission of Ferderated Mutual Insurance Company, Copyright 2009, all rights reserved.
PHCC Educational Foundation.
Visit the Facts & Stats Archive for Links to past articles.