Get Your Risk Management Assessment
So you would like to pay less in insurance premium?
Join my club, as a business owner, I too feel like I’m insurance poor. However, since I’m in the business (and by the business I do mean the industry), I have taken great pains to make sure my premium matches my exposure. I’ve taken this same approach with my clients and here are a couple of tips that might help you reduce your overall insurance cost.
First, look at a self-insured retention on ALL lines. Try and determine how much risk you could take in a given year and ask your risk manager to use pay all claims less than your threshold. For example, if you are comfortable with a $5000.00 self-retention, pay ALL claims that occur, but are less than the $5000.00 limit. STILL REPORT these claims to your carrier. The logic here is that by absorbing the first layer of risk, your long term insurance costs could be lower. This strategy is not wise in a soft market when insurance premiums are not usually tied to claim experience, but more less on the whims of the market, but as the market hardens (see yesterday’s blog), this can be very key in a long term premium management plan.
Also, look at your lines of coverage, what is driving your premium, are you a property driven account, does your liability premium exceed all other lines? Once you can identify this driver, begin to focus on this as a point of reduction. Why is the rate the rate? Are there things you can do to help reduce the exposure? Can you bring in your carrier to offer loss control assistance to help reduce your potential for loss?
Reducing premiums is a tricky business and not for the faint of heart. Take your time, create a plan with good data, work with a professional risk manager, and work smart.
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