Nine ways to cut insurance costs for your business

The Ontario NDP have called for Premier Kathleen Wynne to press insurers for a 15 per cent cut in auto insurance rates for the province’s drivers, but the industry says fraud and false claims need to be tackled first before they can lower charges to drivers.

While such calls are linked to the consumer market, they also point to the need for small business to look at what they pay for all types of insurance.

Here are some tips from insurance industry expert Colleen Lloyd on how to cut your company’s insurance bills:

1. Keep an eye on what you pay for insurance every month. The type of industry your business belongs to may also have a large impact on how much your premiums increase year over year.

“Some insurance companies under realty, retail or restaurants experience a lot of losses, so they’re increasing their premiums,” Martin & Wright Insurance and Financial Services Inc. junior partner Colleen Lloyd told YourMississaugaBiz.com.

It’s also recommended you look at whether your insurance coverage is up to date, or based on equipment or vehicles you no longer have.

2. Shop around for the best rates and deal with different brokers who can recommend ways to cut premiums by adjusting coverage.

There are many types of insurance needed for a company – from business owner coverage to health, property, product liability, disaster and auto and truck insurance. Llloyd said trying to get multiple or all insurance needs covered by one or two companies can help cut premium costs.

3. Never have inadequate insurance but check with trade associations like the Mississauga Board of Trade or professional groups to see if they offer cut-rate insurance if you become a member.

4. See if you can raise your policy deductibles. That may mean you pay more out of pocket but higher deductibles can lower your premiums.

5. Lloyd also recommends checking if you can adjust your liability coverage in your lease agreement.  “Sometimes the landlords will say you have to have carry $5 million in liability,” she said, citing concerns from lawyers about being on the ‘safe side.’

And while Llloyd said sometimes you can negotiate for a lower liability with reasonable landlords, but it’s always better to have a higher limit. “You never know what’s going to happen,” she said.

Lloyd recommends companies check out lease requirements before taking out a unit.

6. If you have cars in your sales fleet, consider having fewer vehicles. Small businesses can also outsource things like truck delivery to outside companies and cut the expense of auto insurance and liability costs.

7. If your company has a health insurance plan, find ways to get your employees to shoulder more of the cost by raising their premiums or deductibles or working with your private health insurer on finding cuts.

8. Worker compensation insurance costs rose Jan. 1. The Canadian Federation of Independent Business said for a small trucking company with five employees, this could mean an extra $394, bringing total 2013 premiums to $16,532.

A small roofing company could be on the hook for $1,061, bringing total 2013 premiums to $43,602.

There are ways to cut workers compensation insurance premiums for next year.

Companies are usually assigned standard charges based on the type of industry they are in and the size of their payroll.

However, premiums are raised or lowered based on a company’s injury history and claims costs. Two simple steps to cut premiums are to prevent workplace injuries through more stringent safety measures and to manage workplace injuries that do occur.

9. Lloyd also strongly recommends that businesses deal with an insurance broker rather than a direct writer or an agent, who are simply employees of a larger company. “You can always contact them when you have questions,” she said regarding brokers.

However, Lloyd said if a direct writer or an agent is contacted about a small incident, once you call to ask they put it on file and it goes on record. “So even if you don’t put a claim in it’s counted as you having a loss,” he said.

 

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