Investing in an air-tight insurance policy is a key priority when running a business.
Regardless of your company size, as a business owner you can never predict when things may go wrong; whether it be a product malfunction that impacts a customer, to a weather incident that results in damaging your commercial premises.
That said, as business owners have increasingly understood the importance of having the right insurance in place, the concept of being ‘over-insured’ has grown as a result; with many paying above and beyond for the level of cover that they actually require.
So, what are the tell-tale signs that you are paying too much for your business insurance, and how can you avoid falling into that ‘over-insured’ bracket?
Your insurance policy is with a generic provider
Many business insurance providers do not cater for different company sizes. For example, if you are a small company with few employees, avoid paying huge amounts for a policy that covers up to 20 staff members. It’s unnecessary, and you could save hundreds per annum just by moving to a small business insurance provider.
Secondly, when renewing your business insurance, take the time to find a reputable provider that specialises in your industry sector. An accountancy firm will always have very different needs to a salon chain, for example, so it’s important to work with an insurance provider who can incorporate the needs of your business into the policy.
By sourcing and working with an industry-specific provider, not only will you be able to invest in a policy that is completely aligned with your business model and size, but it will avoid ‘over-insurance’ and over-payment as a result.
You haven’t read the small print
When was the last time you reviewed exactly what your business insurance policy covered? Without realising it, you may be ‘over-insured’ covering items that you don’t even need.
For example, does your policy cover commercial vehicle insurance, when you have no commercial car? Does your policy provide employer’s liability when you’re a freelance professional? Or does it include buildings and contents insurance when you operate from a serviced and readily insured office?
Take the time to make sure you aren’t insuring yourself for a risk your business doesn’t actually face.
You’ve neglected to inform of upgrades
It sounds obvious but making small changes such as upgrading your business premises with the latest fire alarms, smoke alarms, sprinkler and security systems can make you eligible for insurance discounts.
If you’re a product-based business, this extends to how products are packaged, stored and protected. Ultimately, the lower your risk from the insurer's point of view, the lower your premiums are likely to be.
If you’ve upgraded all safety and security systems within the past few months but are yet to inform your insurance provider, pick up the telephone and tell them today, and at the same time, ask them about any other measures can you can take to help reduce the cost of your insurance premium. This is one key thing that can reduce your monthly or annual costs, preventing your business from falling into that ‘over-insured’ bracket.
You’ve become complacent with your annual renewal
When the time comes to renew your insurance policy, you don’t have to be complacent.
If you don’t use an industry-specific insurance provider and haven’t been able to shape the policy to your business needs, now is the time to make a change.
Alternatively, if you are happy with your current insurance provider and have used them for many years without making a claim, ask them about a no-claims discount or loyalty bonus. It’s simple, but effective and will enable you to save costs for the year to come.
By Jen Davies, senior customer service representative at Salon Gold