Are you looking for ways to save money at your business in 2013? One easy way to cut costs is to look at your business insurance.
There are several things that you can do to lower business insurance costs. Business insurance expert Mark Davidson, a Principal at Walsh Carter & Associates shares some of the top ways that you can save on insurance costs below. Walsh Carter Associates is a full-service insurance brokerage firm in San Francisco.
Hue & Cry: What’s the most important thing businesses can do to lower insurance costs?
Mark Davidson: I think it’s two prong. First would be to get in front of an independent agent where they’ll have access to multiple carriers, and sit down with that agent and go through the operations of what they do. At that point, the agent can identify the available types of credits that could come their way. It’s the best way to cut down that premium.
There are different things that you could look for from a business standpoint. One of the things is to look at packaging multiple lines like maybe property, auto and worker’s comp. You usually get multiple policy discounts.
The second thing you can do is get a burglar alarm. A burglar alarm can give you a savings of 5 to 10 percent. A sprinkler system can give you even more savings. You typically get a savings of 10 to 20 percent.
Hue & Cry: What kinds of penalties are there if your fire alarm system isn’t up to code?
Mark Davidson: There are some major implications, and I see this often. Sometimes, people will find out that they get a discount on their insurance if you say you’ve got an alarm. Often times, I’ll go out to review and take a look at their insurance portfolio and see they’re getting credit for a burglar and fire alarm yet they don’t have one.
A lot of the times the carrier will completely not cover any kind of a loss when there’s deception. That’s a huge negative impact for someone that tries to take the credit but doesn’t have the actual alarm installed.
Hue & Cry: What’s the biggest mistake that you constantly see when buying business insurance?
Mark Davidson: If you’re increasing your payroll or increasing your sales and you don’t tell anyone… at the end of the year there’s going to be a huge additional premium. That’s something that pops up quite a bit. Clients get pretty angry about that because they think, “Why didn’t you tell me about this.”
Also take a look at the deductible that you currently have. A lot of people have really small deductibles. If you have tiny claims on your policy, it’s probably not going to get renewed. So you’re going to get something much higher. One strategy of an insurance policy is for catastrophic protection, total fire, so you increase the deductible to $2,500 dollars and reduces the overall insurance premium pretty significantly. That’s another strategy and cost savings. If you nickel and time the carrier, the prices are going to go way up. I try to advise people to use insurance as a last resort.
Hue & Cry: What kinds of business improvements can help lower insurance costs?
Mark Davidson: Putting in cameras, perimeter lights, no slip floors.
As business owner, your goal is to take precautions to minimize your risks. It’s important to tell your agent if you have non-slip floors, perimeter lighting, etc. These types of credits are decided on a case-by-case basis. It’s up to the individual underwriters based on the perceived risk.
We would like to thank Mark Davidson for participating in this interview. You can find out more about Walsh Carter & Associates by visiting their website at www.WalshCarter.com. Get more information about their services here.