6 ways an insurance review can save your business money and headaches
by Theresa A. Kane, Director of Insurance Services
Are you paying too much for business insurance? How would you know? Insurance can be complicated, and it’s not always easy to determine if you’re buying the best product for the best price.
During an insurance review, we can help make that determination and ensure you’re not paying more than you should. A review might point to better coverage at a lower cost, and if you need more coverage, savings that result from the review could pay for the additional insurance.
Boyer & Ritter is independent of any insurer or broker and our insurance review service frequently uncovers common mistakes such as paying for redundant building equipment and vehicle coverage, incorrect calculations for business income limits and erroneous classifications being used for General Liability and Workers’ Compensation.
Here are six ways that an insurance review can boost your bottom line and give you peace of mind:
1. Find the right Property Coverage
Is there equipment that you use to maintain your building such as a snow blower, lawn equipment, or floor-buffing machine? Does your building have permanently installed equipment like a vehicle lift or manufacturing equipment? These can all be covered under your Building Coverage, which generally has lower rates than the Business Personal Property (BPP) where the equipment is covered now.
Also, consider your current building and its location. If you were to experience a total loss, would you want to replace the building as it is built now (like kind and quality) and rebuild in its current location? If not, Actual Cash Value(ACV) or Functional Replacement Cost (FRC) may be a better option for the valuation of your building.
The deductible and co-insurance of a property can affect your premium as well. We can help you determine your tolerance for loss.
2. Check auto and equipment values
The valuation of Physical Damage Coverage (comprehensive and collision) on automobiles and contractor’s equipment is generally ACV, which includes depreciation. Review your vehicle fleet and equipment schedules to determine whether the ACV of the vehicles and equipment still warrants the coverage for physical damage. There comes a point where the cost isn’t worth what you’d recoup in a loss.
While auto insurers depreciate your vehicles each year, you’re on your own when it comes to determining the value of contractor’s equipment. You could be paying for a limit of coverage the insurance company might never pay out. Re-read your policy: “Stated Amount or Actual Cash Value, whatever is LESS.”
3. Eliminate duplication, plug gaps
Duplicate insurance coverage means paying more than you need to in premiums. Even if the premium amounts are small, over the years those duplicate costs will add up. Some coverages are available under more than one policy or coverage form. Often, one or the other can be eliminated to save costs.
Meanwhile, gaps in coverage leave you exposed to unexpected and costly losses. Having the correct coverage can provide significant savings if you experience a loss.
4. Quantify Workers’ Comp, and General Liability Exposures
An insurance review includes examining the most recent General Liability and Workers’ Compensation audit reports your insurer provided. Audit reviews help to make certain you’re using the correct rating information and not overpaying for coverage.
Establishing a State-certified workplace safety committee, could save an extra 5 percent on your Workers’ Comp premium.
5. Explore Captive Insurance
Our Independent Insurance Review can look at whether your business may benefit from a Captive Insurance program. If a Captive Administrator determines that your business qualifies for a Captive Insurance Program, the captive should provide significant insurance premium savings as well as investment opportunities.
6. Pay your agent wisely
A review can determine if it makes sense to negotiate an annual fee with your insurance agent rather than having him or her work on a commission basis.
In almost all cases except Workers’ Comp, agents can waive commissions. Negotiating a fee for services ensures that your agent will come up with the best price and coverage because his or her income will not depend on your premium.
Boyer & Ritter’s independent insurance reviews can provide your business with a thorough, cost-effective assessment of your coverage. You can use the in-depth report to start discussions with insurance agents and carriers and/or as the basis for seeking new quotes. We can help you prepare bid specifications to shop for the right coverage.
We recommend an insurance review every three years to make sure your coverage continues to be the best product for your needs, at the best price.
Theresa A. Kane is a Certified Insurance Counselor and director of Insurance Services with Boyer & Ritter LLC, where she provides impartial insurance reviews and cost-effective guidance for clients’ coverage needs. Boyer & Ritter does not sell any insurance products nor favor any provider. Contact Theresa at 717-761-7210 or firstname.lastname@example.org