After a tough year, one thing that is going to be on every business owners mind is reducing costs. There are numerous ways of doing this but the one we are going to discuss today is how to reduce your insurance premiums or at the very least how to minimise the effect of the hardening insurance market.

We appreciate Insurance is not the most exciting aspect of running a business, but it is crucial for a business to have appropriate levels of cover and the cost of this can mount up.

There are several ways you can help, and we are going to look at 6:

1 – Risk Improvements.

Insurers can apply discounts to their premium’s dependent on the level of risk they cover, the more risk they are exposed to the more you will pay.

To secure these discounts you need to reduce this perceived risk.

Property Security – By increasing the security precautions in place at your business premises. Adding more advanced security systems, CCTV, shutters and bars to entrances and windows, plus upgrading fire alarms, and smoke detectors are all important to insurers and reduce their chances of paying a claim.

Fleet Management – If you own vehicles providing employees with driver training, driver handbooks and the regular checking of employees driving licences are cost effective ways of improving your fleet, and securing discounts from Insurers.

More costly, but of significant benefit is the installation of dash cameras and vehicle trackers to record and monitor driver behaviour and provide footage to help defend claims from third parties.

All of the features are taken into account by insurers, and you should discuss these with your broker.

2 – Streamlining your Insurance Program

For businesses with multiple policies placed with multiple insurers you can sometimes gain large discounts for placing them all with a single insurer under a single policy. There is a cost associated with the issue of each policy and it therefore makes sense to reduce the number of policies by combining covers. This doesn’t just save money but will also save your time as you only have one renewal to consider, especially if over the years your policies are all due for renewal on different dates.

Products such as Commercial Combined policies are created to allow you to blend numerous types of insurance such as Liabilities, Building, Contents, Business Interruption, Liability, Legal Expenses, Directors & Officers Liability and others in to one package.

3 – Pay up front

This is a simple and obvious fix, although painful at first as it involves a lump sum payment, it saves you paying the cost of financing your premium through the year. Most Insurers no longer offer interest free instalments and whilst there are some competitive finance packages available in the majority of cases it will always be cheaper to pay upfront for your policies.

4 – Unnecessary Cover

If you are using a broker this should be something they are evaluating. Many policies now include additional covers as standard, some you may not have necessarily requested or require. This is great in most cases as it provides extra cover for unforeseen circumstances. However, when considering alternative quotations, different Insurers my charge for these extra covers.

If you purchase multiple policies, it is not uncommon for several polices to duplicate some covers, meaning you could be paying for coverage on something multiple times or for cover you simply do not need.

5 – Shop around

This like the previous point should be what your broker does annually. Insurers rates and risk appetites vary all the time, the cheapest or best cover one year may not be the best option at your next renewal.  Whilst we don’t recommend changing insurers every year we do recommend checking the market.

6 – Tracking incidents and claims

Making multiple claims under a policy will usually cause your premium to rise, particularly if there are regular years of multiple claims.

It is important to monitor claims and why they occurred. This enables you to assess the underlying causes or patterns behind them and make changes to procedures, processes or the layout of a premises to avoid future incidents.

Claims analysis is particularly useful for fleets, where claims can add up quickly and often there are numerous throughout the year. If you analyse these and find a pattern, you can employ measures to reduce them.  This not only reduces claim frequency but also the amount of time your vehicles are off the road.

Many Fleets include Windscreen cover, which if you make many claims a year for damaged windscreens in turn increases your claims frequency, possibly making your cover more expensive or making your fleet less attractive to alternative insurers. It may be worth removing this cover and paying for new windscreens outside of the Insurance policy.