A business manager's job is not only to make money but also to save it. In today's economy, when many businesses are struggling to survive, this is more important than ever. Any way you can find to reduce your expenses is worth a second look, but insurance is one of the areas most overlooked in handling a business responsibly. Since one disaster could financially devastate an uninsured business owner, it is a necessary evil when it comes to protecting your company. A prudent manager can find important cost-saving tips with a little time and research.
How does a business owner get the best deal in insurance? You want enough protection to cover your interests but you don't want to overpay. Even if you have the business savvy to bid out your insurance, this might not be enough to guarantee you are realizing every cost-saving measure available. Each business is unique and with varying risks, and there are hidden costs that an average business owner might not recognize. You will need help in identifying the correct coverage and deductible amounts for your organization.
While it is important to save money on insurance, it is just as important to have adequate coverage. There are many types of coverage an owner will need, including the basic business owner's policy, general liability, commercial auto, health insurance and workers' compensation insurance, just to name a few. Every business is unique and will need its own specialized coverage. Here are just a few cost-saving tips.
A business interruption insurance policy can safeguard your company from unexpected stoppages such as a fire or flood that would shut your operation. This coverage can protect income if a natural disaster or other catastrophe shuts your suppliers down. In such a scenario, the money spent on the premium for a business interruption policy would be well worth the cost.
Every employer who has employees should also have a workers’ compensation policy. Workers’ comp laws vary state by state and are designed to cover workers in the event of an injury or death regardless of fault. While your state might not legally require you to carry this coverage for your employees, it is wise to do so. Without it, you could find yourself legally responsible for deaths or injuries occurring at your job site. Having a well-documented safety program can provide important discounts to your premium. Preventing accidents before they happen will save money in the form of reduced premiums and the loss of employees’ work hours due to accidents or injuries.
Another area requiring some analysis is your health insurance plan. The amount of your deductible and co-payments will of course impact the price of your policy. While higher deductibles and co-payments might save you money on the premium, you should also be prepared for a worst-case scenario where an employee needs specialized care and expensive drug treatments. Introducing a wellness program at your workplace is one way to save money on premiums. Many carriers offer discounts for employees enrolled in wellness programs at work. The goal of such a program is to teach employees how to live a healthier lifestyle and encourage such changes as quitting smoking and losing weight. As employees become healthier, they will spend less time off work and less on doctors’ visits and prescription drugs.
Check into group rate discounts by purchasing your insurance through a professional business organization. Many offer discounts to their members. The dues paid to join such an organization might be well worth the savings you realize on your business insurance premium.
As a final thought, review your business insurance coverage at least quarterly. Consult with an independent risk manager along with your CPA, who will know and understand tax laws and legal requirements for businesses. They might be able to offer even more cost-saving tips for your company.