It is always necessary for all business owners to constantly look for ways to cut down on expenses. There are many aspects to focus on when wanting to reduce the costs, of which, lowering your business insurance premiums is one of them.
While it is crucial to be covered to protect your company, it is also important to ensure that the operating expenses on the corporate insurance premiums are not overspent. Knowing how to reduce insurance premiums as a business owner will help your company become stronger and more profitable. Here are some ways to reduce the business insurance premiums for your business.
Shop Around
It is vital to do comparison shopping since different insurers can charge different rates for the same coverage. If you understand the coverage needs of your company, you can consider shopping for business insurance online with insurance companies. On the other hand, if you are uncertain of the coverages needed for your business, you can consult with agents to solicit quotes and the most suitable coverage for you.
Understand the Insurance That Your Company Needs
While we recognize that many businesses seek to be adequately covered and protected against risks, not all types of insurance are necessary for your company. Corporate Insurance companies in Singapore can assess the sorts of coverage required for your business so that you acquire only the coverages that your business needs and not over-insure.
Do not downplay the possible risks. If your agent does not know sufficient information about your company, they will be unable to assess the risks involved precisely. On the other hand, providing your insurer with specific underwriting information provides you with a more competitive rate and guarantees a more accurate premium rating. This will in turn cost you a lot more than the cost of the insurance premiums.
Source for Insurance Brokers
If you just started a small business and have no prior knowledge of corporate insurance, buying insurance without the help of a broker can be difficult. You may end up buying business insurance you do not need. A broker can guide you through the process and conduct a proper assessment to recommend the right business insurance premiums to suit your needs. The broker will also search the market for you and find the right insurer with the best deals.
Evaluate Policies Regularly
It can be convenient to renew a policy when you receive the notification to renew your expiring insurance premium. However, it is best to methodically review your insurance premiums instead because businesses, like your risks, change over time. As your business progresses to the next stage, there will be a change in the potential risks faced. Since some risks may not need as much coverage or no longer exists as time passes, you may be over-insured in some areas or have policies in place for risks that may not or no longer exist in your current business. It is important to review your existing insurance coverages and terminate coverage that overlaps or is no longer applicable to your company. Expenses will be reduced after eliminating insurance premiums you no longer need.
Similarly, when there are changes in your company (i.e. new equipment acquired, no longer in use, or employees leaving or joining your firm), it will be best to notify your insurance provider at the soonest time possible. These changes have a great influence on your premium rates since having new employees will mean coverage for more people which will increase the cost easily. On the other hand, when employees leave your firm, you should not be bearing additional coverage costs. In fact, this is another opportunity to reduce the cost of insurance overheads due to the lower headcount.
Hazard Mitigations
Strengthening security precautions is another way to reduce operating expenses on insurance.
Here are some of the ways:
Security systems: Having security systems like maintaining robust security protocols protect your business against cybercrimes. If your business handles mainly sensitive customer data, having security protocols is especially essential since it can be an attractive target to hackers. When the security system is strengthened, it helps to reduce your exposure to cyber-attacks as well.
Employees Training: Workplace safety training like injury prevention and first-aid training are crucial to the company since they will be less likely to sustain injuries or injure another employee. Having such training makes your company less prone to accidents since they will know how to perform their jobs safely. On top of the safety training, offering refresher training courses on an annual or quarterly basis helps to ensure that your employees do not forget the necessary precautions needed to ensure a safe working environment. However, there is an extent that this safety training can do, safety guidelines have to be set and followed strictly to ensure that the company is less accident-prone.
Analyse your operations environment: It is important to analyse the working environment for your employees. Check with your employees regularly to find out about the safety precautions that are currently in place and the areas to improve. Conducting regular checks to ensure the safety of the employees before adding new operating machines will help reduce the accident risks. This will reduce the cost of the insurance premium since the risks have been minimised and would not require as much coverage as before.
Healthy Behaviours
To reduce your health or work injury insurance premiums, healthy behaviour ought to be strongly encouraged and incentivized accordingly within your company. For instance, you may sponsor exercise or enrichment sessions, such as yoga or spin classes, to your employees to promote an active lifestyle. You can also uphold a “no smoking” policy in the workplace to reduce the frequency of smoking and hence its negative effects among employees who smoke. When there are active efforts to make the employee healthier, it reduces the incidence of your employees making insurance claims and paying higher insurance premiums thereafter.
Demonstrate a Well-Run Business
Insurers will typically charge a lower premium for businesses that have taken measurements to ensure that they are compliant with industry best practices. These practices may include (but are not limited to):
- In-house risk assessments
- Comprehensive quality control procedures
- Prompt filings of financial accounts
- Regular audits
- Proper documentation of employees’ professional accreditations, qualifications, training, and ongoing development
Demonstrating these practices can usually net you a discounted rate for your insurance premiums compared to a similar business without such practices. If you are unsure of which practices to adopt for your company, your insurer’s risk control expert is generally able to advise you on the Key Performance Indicators they use to quantify your risk profile. With that, you will have a better idea of the relevant best practices and likely recommendations on how to fulfil those to achieve lower premiums. On top of that, such practices are signals of a well-run company with a structured and organised approach to employee welfare, which will boost its attractiveness in the job market.
Consult an Insurance Expert
There is no straightforward answer or a simple way out to reduce your small business insurance costs. Different businesses and industries will need different coverages and face various potential risks. By sitting down with an insurance agent or broker, you can understand the precise needs that your company needs to defend against unforeseen circumstances. You can always consult insurance brokers if you do not have one to help determine if costs can be reduced while still protecting your business.
