How can a business reduce large liability insurance premiums?
Liability insurance for any business or practice can be enormously expensive.
But a few cost-cutting strategies can help you buy more insurance protection
or pay smaller premiums: 1) Segregate the costs for each type of insurance
you now own. You may discover that one type of coverage tripled in cost
over the years while other coverage has decreased. Which coverage is still
a good buy? Which should you reduce or eliminate? 2) Increase your deductibles.
Absorb whatever losses you can afford. You’ll substantially reduce
your premiums. 3) Utilize free programs that cut insurance costs. For
instance, insurance companies reduce vehicle insurance premiums by enrolling
risky drivers in drivers’ education classes. 4) ‘Red-line’
or distressed area businesses may qualify for federal or government subsidized
insurance. Inquire with your state insurance commissioner. 5) Your trade
association might deliver substantial savings if you buy the liability
insurance they sponsor. 6) Do you own multiple businesses? Buy a package
policy. It can reduce your premiums by 25 percent or more. 7) Buy only
vital insurance. For instance, as your equipment depreciates, lower its coverage.
Insurance companies pay only replacement values for lost assets. Excess
coverage wastes money. 8) Shop. Insurance rates are regulated in only
several states. Once you know the coverage you want, get five bids. Repeat
the process annually. Today’s lowest costs insurer may be next year’s highest.