Even in today’s world of extreme weather, security breaches and other reasons that seemingly cause insurance rates to skyrocket, it’s easier than many think to reduce your commercial insurance premium. How, you ask? Make your business marketable to insurance carriers.
Brokers aren’t controlling the price of your premium. Think of them as the middleman, simply relaying your information to the insurance carrier, who then analyzes it and, in turn, provides the estimate. That’s why it’s important to have a high level of communication with your insurance broker: He or she is the one responsible for relaying key data about your business’ risk profile to insurance carriers.
Insurance carriers look for low-risk companies that are not likely to have a high number of claims. Therefore, the safer or less risky you appear, the more appealing your business is in their eyes — and the more likely they are to give you a lower rate. Think of it like car insurance. Teenage males are known to incur higher rates because they often have spottier driving records, drive more often than females do and are less likely to wear their seat belt. Once they prove they are safe and reliable, their rates often decrease significantly.
Here are four steps to lower your risks and ultimately make your business an ideal candidate for a lower insurance premium.
1. Make sure your workplace is safe
It can’t be stressed enough: A well-thought-out safety plan is key to increasing your chances of a low insurance premium. Your current plan should clearly state your company’s safety rules, procedures and standards of conduct. Be sure your plan is always up-to-date with the latest OSHA mandates, and don’t forget to include any company-specific procedures that align daily practices with safety guidelines.
Annually, check to make sure that your personnel are following safety protocols, that equipment is maintained and that your safety training is utilized. As practices are assessed, make a list of follow-up activities to be implemented so that necessary corrections are made and procedures are current.
2. Revamp your employee handbook
An up-to-date employee handbook that thoroughly documents your company’s rules and procedures is crucial to any business. It shows you are organized and meticulous, especially when it comes to mitigating claims. Review your handbook with each team member when they start the job — and with your whole team regularly and as you make changes. Be sure everyone has access to a copy for reference.
Additionally, review your employee handbook at least once a year with your lawyer and insurance agent to make sure it includes current information and any new industry requirements.
3. Implement a robust safety training program
A well-written safety plan is only the first step to mitigating workplace mishaps. Offering training programs for your employees is a solid way to reduce accidents due to human error. Such programs can range from harassment to disaster preparedness. Remember, the riskier (to insure) you appear, the higher your premium is likely to be. Implementing safety procedures and training programs shows carriers you are committed to reducing risks, which means you are less likely to incur claims.
Offer different types of training methods to ensure materials are accessible to different learning styles, including options like videos, in-person workshops, infographics and short quizzes. Be sure to also include the training program as part of employee onboarding.
4. Be prepared
It’s impossible to know when disaster will strike, but it is certainly possible to be prepared. Whether it’s a natural phenomenon, such as a flood or tornado, or a man-made disaster, such as a chemical spill or security breach, an unexpected crisis can disrupt normal operating procedures. No one knows that better than insurance carriers. Show them you’re equipped to deal with any situation by creating a disaster preparedness plan.
The plan should highlight worst-case scenarios and provide instruction on how you will deal with them. It should answer questions such as: What if employees need to work off-site? What if you need to operate with a limited crew? Is there a way to communicate if the phones and/or internet is down? Who is the company spokesperson in a time of crisis? Who will notify employees? What if key data or client information is damaged?
Make sure your employees are aware of your company’s disaster preparedness plan and test them regularly. This detailed plan ensures minimal disruption to your business and shows insurance carriers that you are ready to operate as normally as possible if a disaster strikes.
You can never be too cautious when it comes to workplace safety. Actively preparing for and preventing risks gives your company an edge. Not only will you save money dealing with avoidable incidents and claims, insurance carriers will see you as a safer entity as well. And that gives you a better chance at scoring a low premium, while increasing your company’s bottom line.
About the author: Based in Nashville, J.B. Ruble is a business insurance consultant with middle-market business insurance firm Fisher Brown Bottrell Insurance, which is a wholly owned subsidiary of Trustmark National Bank, a publicly traded financial services company with more than 200 locations and more than 3,000 associates in Mississippi, Florida, Tennessee, Alabama and Texas. For more information, contact Ruble at [email protected] or visit www.fbbins.com.