As a small business owner, you care about your employees’ success, as well as their wellbeing and their safety in the workplace. With that said, even the most conscientious employers have to face the fact that mishaps can and will occur even in the safest of workplaces. Accidents are inevitable in any workplace. So, it’s crucial that you have sufficient workers’ compensation coverage that will protect both your business and your employees. As important as workers’ compensation coverage is, it can feel like a burdensome expense. And yes, it can be expensive. Luckily there are ways to save money on your premiums so, you can have peace of mind while sticking to your small business’s budget.
Calculating Workers’ Compensation Premiums
The amount you’ll pay for worker’s compensation insurance is calculated using a simple formula. The premiums for workers’ compensation insurance are calculated per $100 of your company’s payroll. That means that your rate will go up as you hire more people.
In addition, the nature of your business, and the type of employees you have, will play a major role in establishing your premium. When purchasing workers’ comp, you’ll have to give each employee a class code, based on the risks of their job. Each state provides the class codes for different types of employees. For example, a warehouse supervisor and an administrative worker will have different codes. So, there will be a big difference between the rate at a factory and the rate at a beauty supply store. In order to ensure that your business is charged a fair and reasonable rate, it is crucial that your employees are classified correctly.
Your final price will be adjusted based on a number of factors, including “modifiers.” The modifier will be based on your claim’s history. Your insurance company will go over your claims history and assign you a modifier. The typical modifier rating is between .75 and 1.25. Modifiers of 1.0 or less are possible if your business has a documented history of successfully lowering workers’ exposure to injury risk. If there have been numerous incidents at your workplace, your modifier will be higher than 1.0. If you can get your modifier for workers’ compensation insurance down to 1.0 or lower, your premiums will go down.
9 Ways to Cut Workers’ Compensation Costs
The following are some simple things that you can do right now to cut down on your workers’ compensation costs:
Choose the Right Workers’ Compensation Policy
It is essential to do some comparison shopping in order to find the best workers’ compensation insurance policies. In the same way it is when choosing the best auto or health insurance policy for yourself. If you live in a state that has a competitive market, which the vast majority of states do, it is in your best interest to speak with multiple insurance companies about the premiums they are willing to offer you and your business.
Once you have a policy in place, you should continue to shop around at least once every few years, since insurance companies will periodically change their prices in an effort to woo customers away from their competitors. Unfortunately, if you live in a state that does not have a competitive market, you won’t have the option to shop around. But there are still other steps you can take to lower your premiums.
Follow Claims Management Best Practices
Perhaps the single most important thing you can do to keep your workers’ comp costs under control is to make sure you’re handling claims with best practices for claims management. “Best practices” include simple tasks like keeping in touch with the employee and possibly medical personnel. This can mean staying on top of any possible issues that may pop up, such as coverage not kicking in on time or money not coming through.
If you need help, an adjuster can make the process go smoothly and save you money by doing things like making sure all paperwork is filed on time, verifying coverage, and keeping a daily diary of all work completed on the claim. This may cut the payout amount by as much as half.
Create Strong Safety Protocols
Creating a safe workplace environment can do wonders for employee morale. As well as help save money on workers’ compensation claims. It’s less difficult than you might think to establish a culture of safety. In fact, you’re probably already doing some of this work already.
First, make sure your staff has access to the tools and information they need to stay safe on the job.
If you don’t do so already, schedule periodic safety inspections.
Use daily safety checks to constantly remind workers to be cautious whenever they are at work.
Plan weekly and/or monthly in-depth inspections.
Putting an emphasis on safety will not only reduce accidents and injuries among workers and help lower your workers’ compensation premiums but will also demonstrate your concern for their well-being.
Know What to Do in Case of Injury
Having a strategy ready in the event of a workplace injury is an important part of fostering a culture of safety. Managers, co-workers, and the claims adjuster would all have immediate tasks to perform in this scenario. For this to go smoothly, each person involved needs to know what they are responsible for.
Having a plan in place gives workers the opportunity to make choices that lessen the severity of injuries on the job. In the event of an accident, they will feel more at ease knowing that everyone around them is prepared to help.
Offer New Hire Incentives
Incentive programs are a great way to motivate employees, especially new hires, to follow the safety procedures in place. You can offer more experienced workers incentives to teach newer workers about your business’s safety culture.
Utilize Return-To-Work Programs
Workers’ compensation costs tend to be lower for businesses that utilize return-to-work programs. These programs encourage injured workers to return to some sort of duties as soon as possible. Doing so will help with the indirect costs of an employee’s injury such as:
Overtime pay for workers who do the injured person’s duties,
Compensation to cover a decrease in productivity,
The cost of hiring and training new workers.
The time that managers or supervisors have to take away from their administrative duties to help out.
With all that said, the sooner an injured worker returns to work and starts making money again, the less you will have to pay. So consider implementing some sort of return-to-work program.
Look for Workers’ Compensation Discounts
Find out if your state offers workers’ compensation discounts to businesses that implement safety programs. For instance, some states reward businesses that promote drug-free workplaces with tax breaks. Since workers who use drugs while on the job are more likely to get injured. So, showing that you promote a drug-free environment by doing things like requiring regular drug testing for employees can get you a tax break for being proactive.
As noted above, not only will different companies have varying overall workers’ compensation rates. But the costs associated with various categories of workers will also vary. A sheet metal worker, for instance, will have a different classification code than a bookkeeper. Who spends little time in the factory. This means that it’s extremely important to verify that each worker has been assigned the appropriate classification. You can save a lot of money by following this one piece of advice.
Check for Workers’ Compensation Safety Rewards
It is possible that the number of accidents that take place at work will decrease after you begin putting some of these ideas into action. Check with your insurance company to see if they will reduce your premiums in recognition of the fact that your business has been safer for the past year. These kinds of safety rewards are typically distributed after a period of one year during which there were fewer claims filed. These rewards are not guaranteed. So, it is important to check with your insurer to determine whether or not safety rewards are currently being offered.
Get Workers’ Compensation With EZ
Most businesses are required by law to carry workers’ compensation insurance. Doing so will not only protect your business but will also protect your employees. Keeping your employees safe, though, does not have to be a financial burden on your business. There are a lot of different ways to encourage safety routines and programs, all of which will help you cut down on the amount of money you have to spend on workers’ compensation. Your employees will be able to return to work as soon as they are medically cleared to do so if the best practices for claims management are implemented and adhered to in a timely manner. Not only will production return to normal, but also the costs associated with workers’ compensation will decrease.
If you’re looking for the best workers’ comp policy, come to EZ for free instant quotes from one of our licensed agents. And, if you already have workers comp benefits but would like to shop around, we can help you look for a better deal. Your EZ agent will be well-versed in the regulations in your area. They will be able to advise you as you shop around for the best policy at the most affordable price. To get started, simply enter your zip code in the box above. Or give us a call at (855) 694-0047 to speak with one of our licensed agents. Also be sure to check out our blog for more resources focused on helping business owner save money and stay protected.
It’s time to settle something once and for all. Are all types of liability insurance created equally? The quickest answer is, of course, no. General liability covers the physical damage that we often think of when we think of commercial insurance: property damage or a personal injury that happens on your premises. But then we come to the policies that protect businesses against the costly mistakes they could make: professional liability, errors & omissions, and malpractice. If you’re wondering whether these three terms can be used interchangeably, read on for clarification.
Professional Liability vs E&O
Professional liability and errors & omissions insurance, or E&O, are the terms that are often used interchangeably. Historically, these two types of policies were actually different. Professional liability was bought by professionals such as doctors and lawyers. E&O was for semi-professionals such as accountants and real estate agents. Nowadays, most people don’t make this distinction between them, and use either term when talking about insurance that covers mistakes or damages that do not involve injury to people or property.
There is, however, a small difference between the terms “professional liability” and “E&O.” Professional liability is actually more of an umbrella term that includes policies like E&O, directors and officers liability insurance (D&O), and employment practices liability insurance (EPLI).
This small difference is also related to what type of business you have. If you’re a consultant, engineer, or accountant, you’ll probably have a professional liability policy. These policies are also highly recommended for estheticians, hairdressers, yoga instructors, personal trainers, or anyone who offers a service to customers that has a risk of going wrong. However, if you’re an accountant, real estate agent, tech professional, or anyone who could make an “error” or “omission” when giving advice, then the policy you buy is more likely to be called E&O insurance.
Malpractice
If professional liability and E&O are essentially the same thing, then is professional liability the same thing as malpractice insurance? Well, no. As described above, the term “professional liability” is an umbrella term for insurance policies that protect businesses against lawsuits stemming from mistakes. Malpractice is a type of professional liability insurance, but professional liability is not necessarily malpractice insurance.
Malpractice is industry-specific, required for doctors and often bought by lawyers. The idea behind the coverage is essentially the same: professionals pay premiums to be covered in case a patient or client alleges damages due to negligence. What is different in this case is who it covers.
Insurance can be complicated. It can often seem like you need to learn a whole new vocabulary just to figure out what your business needs. Remember, you need to be covered for all eventualities. You don’t want to see all of your hard work go to waste because of one costly mistake. You wouldn’t risk your property being uninsured, and you should be just as serious about insuring yourself against unseen damages. If you are offering a service or advice to your customers/clients, then you should have some form of professional liability insurance.
If you’re looking for the right insurance for your business, EZ.Insure is the best place to look. We offer instant quotes and access to local, knowledgeable agents – for free! We’ll answer all of your questions, and will find you just what you’re looking for at just the right price. Easy as that. To get started simply enter your zip code in the bar above. You can also speak to a licensed agent by calling (855) 694-0047.
If you’re a business owner who works with contractors or hires others to work for you, you’ve probably requested a certificate of insurance (COI). Or perhaps businesses you’ve worked with have requested to see yours. This document serves as proof that a business or contractor is insured. It outlines the types and amounts of coverage, ensuring that you and others are protected against accidents or mistakes. One of the most widely used and recognized forms of a COI is the ACORD certificate. An ACORD certificate is a standardized document that provides proof of insurance coverage, summarizing key details such as policy types, limits, and effective dates in an easy-to-read format. It’s commonly requested in business transactions to confirm adequate liability and property insurance coverage.
What is an ACORD Certificate?
ACORD certificates are governed by the Association for Cooperative Operations Research and Development. This association is a non-profit organization that provides the standardized forms and certificates for almost 90% of US property and casualty insurance carriers. Before ACORD created standardized forms, insurance companies had their own policy forms, which made it confusing for agents and brokers.
With standardized forms, it’s easier for small business owners to review their insurance and prove to customers and partners that they’re insured. If a document meets the ACORD’s standards, it will have “ACORD” stamped on the top left corner of the document. The insurance agency information will be located just below the stamp.
The ACORD 25 form, also known as a certificate of insurance (COI), is a type of liability insurance certificate that provides evidence of liability insurance, such as general liability insurance or professional liability insurance, and is the most commonly requested certificate of insurance.
Tips Involving ACORD Certificates
When you purchase any type of liability insurance, ask your agent for an ACORD certificate so that you can provide it to any client or business partner that you want to work with. Having this certificate provides proof of your coverage shows businesses or clients that working with you that you have sufficient liability protection.
Common ACORD Certificate Categories
ACORD certificates are categorized by numbers. This gives people a better understanding of the specific forms they might send to prospects or receive from contractors. Some of the most popular forms used in the insurance industry are:
Certificate of Liability Insurance (25)
Evidence of Property Insurance (27)
Certificate of Property Insurance (24)
Evidence of Commercial Property Insurance (28)
Additional Remarks (101)
Ask Upfront to See ACORD Certificates
If you are going to work with a contractor or another company, you need to make sure they have their own liability insurance. This will protect your business in the event that they:
The best way to do this is by asking them to send you an ACORD certificate. You should be able to do the same if asked for proof of insurance. When you send an ACORD certificate, it shows that you are responsible, and puts people at ease. With this documentation on hand, individuals and business will be more likely to want to work with you. If your insurance carrier cannot issue ACORD certificates, it might be time to switch to a one who is compliant with your industry standards
Pay Attention to the Details
In addition to confirming proof of an ACORD certificate, it’s vital that you carefully read over the document’s details. ACORD certificates include key insurance information such as expiration dates and coverage limits, which could effect your level of protection. By taking the time to thoroughly examine ACORD certificates, you ensure that your contractor’s policy is up-to-date and provides adequate protection.
It’s also worth mentioning that ACORD certificates are not replacements for an actual insurance policy. While they provide a snapshot of coverage, this documentation doesn’t modify terms of the policy or guarantee coverage. With that said, it’s always wise to request a complete copy of the actually policy. This is especially true if you’re working on a high-risk or high-value project.
Learn More at EZ.Insure
If you want to learn more about ACORD certification, or if you have any other commercial insurance questions, an EZ agent can help! We’ll assess your business’ needs, compare top plans, and find a policy that’s right for you, all in minutes! To get free instant quotes, simply enter your zip code in the bar above, or to speak directly with one of our agents in your area, call (855) 694-0047.
Once your business is up and running, you might come to the realization that you can’t do it all, and you’ll need more help. Instead of hiring a full-time employee to handle some projects, you might opt to go for an independent contractor, vendor, or other third party. This is a great choice for small business owners, to save money and grow your business. When you go this route, it’s important to understand the downfalls if you don’t properly insure independent contractors you hire.
Insurance Options
If you decide to expand your workforce with independent contractors, you might have to upgrade your commercial insurance. If an independent contractor you hire makes a mistake without insurance, you could end up paying a lot of money.. That’s because the client can sue both you and the contractor for financial damages. With all that said, it is important to be protected in these instances. So you have two options:
Hire an insured contractor: If something goes wrong and you are sued, you can sue the contractor and recoup some of your losses. You can check if they have coverage by reviewing their certificate of liability insurance.
Add your independent contractor to your general liability policy as an additional insured: This means that they are covered by your insurance for the duration of the job. Make sure you have the right commercial insurance policies. This means a policy covering temporary staff and independent contractors for any work they perform for you.
Key Benefits of Independent Contractor Insurance
When working with independent contractors, having the appropriate insurance coverage in place can provide critical protection for your company. Here are some major advantages of ensuring your independent contractors are properly insured:
Financial Protection from Lawsuits. If an independent contractor has an accident or makes, getting them insured protects you from major financial losses. Without appropriate insurance, your company may be held liable for damages, legal fees, and compensation. Independent contractor insurance assures that you are not solely responsible for these charges.
Coverage for Errors and Omissions (E&O). Contractor errors and omissions insurance (E&O) protects against claims based on mistakes, negligence, or inability to deliver services as promised. This coverage protects your company against the financial consequences of contractor errors, protecting you from costly legal fights.
Liability Insurance for Third-Party Injuries and Property Damage. When independent contractors are covered under general liability insurance, it provides protection against third-party claims for bodily injuries and property damage. Whether an accident injures a client or damages their property, general liability insurance covers such instances, reducing your financial exposure. You can add a contractor to your policy as an “additional insured.” That way the policy covers accidents, property damage and physical injuries caused by the contractor
Professionalism and Peace of Mind. Contractors with insurance or who are covered by your policy ensure that both parties are protected, providing you with peace of mind. This not only protects your organization, but also strengthens your reputation as a responsible business owner.
Reduces Potential Gabs in Coverage. With an independent contractor add to your policy, you’ll reduce potential gaps in coverage. Doing so is crucial for safeguarding your company against unforeseen liabilities resulting from contractor errors or mishaps.
Professions Where Independent Contractor Insurance is Crucial
Independent contractor insurance is especially crucial for specialists in high-risk industries. These are jobs where liability, property damage, or errors can result in substantial financial losses. Some occupations where this insurance is particularly important include:
Construction Workers and Contractors. Construction projects involve numerous hazards, including property damage and on-site accidents, making liability coverage vital.
Freelance Designers and Developers. Errors in design or software development may result in financial losses for clients, prompting legal action.
Consultants and Business Advisors. Mistakes or oversights in professional advise can have financial or legal ramifications for clients, making professional liability insurance essential.
Real Estate Agents and Brokers. These specialists handle major financial transactions and may face legal ramifications if problems develop during negotiations or closings.
Photographers and Videographers. Misplaced or damaged equipment, missed photos, or liability during events can result in financial loss, hence insurance is essential for these positions.
Compare Quotes
Considering the cost of court fees, medical expenses, and repairs that might arise from negligence or accidents, having the appropriate insurance coverage is less expensive than risking the financial strain of a large liability claim. To save money, compare free quotes with an EZ agent. We’ll provide you with one agent to walk you through the process and find you the best policy available. To get free instant quotes, simply enter your zip code in the bar above, call us at 855-694-0047. No hassle, no obligation.
More and more Americans are leaving their cubicles to work on their own. Well, why not? You decide how to run your business. You decide when to work. Who is on your team is up to you. Those are some great perks. So it’s not surprising that there are 15 million self-employed professionals in the American workforce right now, and that number could nearly triple in the next two years.
But there are some things you can’t control or plan for in business or in life. What if something goes wrong on the construction site and one of your clients gets hurt? Or what if you get hurt in a freak accident and can’t work anymore? Those “what if” questions are enough to turn the dream of a self-employed entrepreneur into a nightmare. So, if you work for yourself, you need insurance to protect yourself, your family, and your business. You’ve worked too hard to leave anything unprotected. But how do you know which types of insurance for self-employed people need and don’t need? Let’s look at types of insurance that will make you feel safe.
Self-Employed Business Insurance
Whether you’re a plumber or a freelance writer, there’s always a chance of something going wrong with your job. Some people are more likely to get hurt on the job, while others may be more likely to be sued. Insurance for self-employed individuals is crucial to cover the risks of your work. Here are the four most important types of business insurance to look into.
Liability insurance will protect you financially in the event that someone sues you for damages after slipping and falling in your coffee shop. Or breaking an expensive vase while cleaning a client’s home. Slander suits are also covered by general liability insurance. This sort of protection is available both as a separate policy and as part of a business owner’s policy.
Listen, we all have our flaws, and everybody messes up sometimes. This is where professional liability comes in handy. It’s insurance that protects you in the event that a client is harmed as a result of a service you provided or advice you gave. It is also known by its more common name, errors and omissions insurance. Professional liability insurance covers financial losses in the event of injury or damage. While general liability insurance covers injuries and damages to property.
A business owner’s policy (BOP) gives your small business protection against a wide range of claims. It does this by combining two types of coverage. Commercial general liability insurance and Commercial property insurance are both parts of its coverage.
The part of a BOP called “general liability” protects your business in case someone makes a claim against you or your business. General liability insurance protects you from lawsuits if something like a customer slipping on a wet floor. Or a faulty product causing damage to a client’s property. Or a claim that your products or services hurt someone. It can also protect you from libel, slander, and certain advertising lawsuits.
The property part of a BOP helps protect the buildings, equipment, furniture. And stock that you own, rent, or lease for your business. It helps pay to fix or replace things that are stolen, broken, or destroyed, even if they don’t belong to you but were in your care. It can also pay for things like rent, payroll, and other bills while your property is being fixed or replaced after a fire or other covered loss.
If you have employees, no matter the nature of your business, you are required by law to carry workers’ compensation insurance. Workers’ compensation insurance, also known as “workers’ comp,” is a mandatory type of coverage that will provide financial support to your staff if they sustain an injury while performing their job duties. It serves as a disability insurance pool that reimburses workers monetarily and/or provides medical care in the event of an illness or injury. If you want to learn more about the workers’ compensation laws in your state, you can visit the state by state guides on our site.
Physical dangers such as injury and property loss are ever-present in the business world. However, there are dangers associated with using technology that could affect your company. Data leaks and hacking are just two examples. Information about customers’ identities or medical histories that you store on company computers is a prime target for hackers. In order to quickly recover from a data breach or cyberattack, it is crucial that your company be covered by data breach or cyber liability insurance.
If you’re in business for yourself, it’s important to have a basic understanding of health insurance. As a first step, you should enroll in a health insurance plan. If you do not have health insurance this year, you could be fined by the government depending on what state you live in. More importantly, you and your loved ones are taking a serious risk if and when a medical emergency arises.
In addition, if you have been relying on your employer to provide health coverage, you may be in for a rude awakening when you compare prices. Since you no longer have an employer to split the cost of health insurance with, you must do so on your own. The good news is that self-employed professionals can reduce their tax liability. The quickest way is by deducting the money they spend on health insurance premiums.
How To Reduce The Cost Of Self-Employed Health Insurance
A high-deductible health plan (HDHP) is a good option for those looking to save money on health insurance premiums. A higher deductible on your health insurance plan means you’ll have to pay more out of pocket for medical care before your policy kicks in. However, the trade-off is cheaper premiums every month.
Opening a health savings account (HSA) is an option with your high-deductible health plan, making it an even better value. The funds built up in a health savings account (HSA) are exempt from federal income tax, allowing you to save tax-free for future medical expenses. It’s a good idea to consult with an EZ agent, who can explain your options and guide you toward a policy that works for your finances and your loved ones. They will assist you in locating competitive rates and suitable protection.
Self-Employed Disability Insurance
If you’re self-employed and become ill or injured and unable to work, disability insurance could help replace some of your lost income. There are both public and private options for disability insurance. The government provides some options, such as the Social Security Administration and some state programs.
When you’re self-employed, you can buy your own disability insurance policy rather than participating in a potentially more expensive group plan through your employer. You may still be eligible for a group policy through your spouse’s employer or a trade group. You may have more options with an individual policy, but the premiums may be higher. Policy features such as the waiting period, riders, and the definition of disability may be up for negotiation.
Short vs Long Term Disability Insurance
Disability coverage comes in two flavors: long term and short term. Long term disability insurance typically has an elimination period of several weeks to months and a benefit period of several years up until retirement. There may be no waiting period or one as long as two weeks before benefits begin with short term disability insurance. Although long term disability insurance that pays out until retirement age is ideal, a short term policy could be worthwhile as well. In general, shorter waiting periods and longer benefits payout periods tend to come with higher premiums.
For an additional premium, you can secure coverage that the insurance provider can’t revoke for any reason (including your failure to pay premiums) with a noncancelable policy. With guaranteed renewable policies, the insurer cannot cancel your coverage. But they can raise your premiums along with other customers in your rating class. Additional riders, such as cost-of-living adjustments (COLA), residual benefits in the event of a partial disability, premium refunds for going claim-free, premium waivers in the event of a disability, and so on, can be purchased for an additional cost.
EZ Can Help
Working independently or as a freelancer allows for more freedom and a better work-life balance. One disadvantage is that you will be responsible for arranging your own insurance. It’s essential that you do this. Since an accident or emergency can cause financial ruin if you don’t have the proper insurance. As a result, self-employed people who don’t have insurance are taking a risk by not doing so. However, EZ can help! We offer free instant quotes on business insurance for the self-employed and we can even help you find the best plans for you. Enter your zip code in the box below or call one of our licensed agents at (855) 694-0047 to get started.
Almost any time of the year, fires, floods, storms, hurricanes, and many other disasters can cause a lot of damage to homes and businesses. One of the first things a business owner should do to protect their investments from natural disasters is buy business insurance, specifically commercial property insurance. Commercial property insurance is a type of property loss coverage. It protects your business from damage caused by things like bad weather, theft, and vandalism.
This coverage is different from homeowners’ insurance in many ways. Because if a business is ruined and can’t run for a while, there are more expenses to worry about. Since business costs don’t stop if the building is in disarray, a disaster can cause a loss of business in the future. Which can lead to a loss of income while the building is being fixed. Commercial property insurance and the purchase of add-ons to the policy can help cover the costs of repairing the property and keeping the business financially stable in the meantime. But how are the rates for this type of coverage determined?
The Equation
Your underwriter will use all of your data and information you send to plug into an equation to figure out the premium. To start you’ll submit a statement of values (SOV) to your insurance company. A SOV is a thorough list of your assets that your insurance company will use to figure out how much it would cost to replace all of your business’s property and equipment. The total sum of your SOV is now added to your expected business income for the upcoming year. Giving you your total insurable value (TIV).
Your underwriter will then take your TIV and multiply it by your exposure risk rate, which is decided by the rating agency your insurer uses, divided by $100. This sum will give you your premium. Say your TIV is $1,000,000, and your exposure risk rate is $0.4 per every $100. The equation would be $1,000,000 x $0.4/100=$4000 annual premium which is about $333 a month. There are a lot of things that go into getting the numbers to put into the equation though. Things that affect your premium are:
Claims History
The first thing that many insurers look at is how your history of claims compares to that of other businesses in your field that are about the same size. If your business has more or worse claims than others, you’ll have to pay more. However, there is a way to keep your claims at a minimum, or fix the claims history you already have. Accident and injury claims can all be reduced with a good safety program at work and careful risk management, especially when compared to other companies.
Regular safety inspections and a review of safety management to find risks can help you find possible problems so you can fix them before they cause problems. Accident and injury claims can also be cut down by making sure your workers have the proper training on the equipment that they’re working with. If you have a bad claims history and after you implement these safety regulations, you can show your insurer that you have significantly less claims over the course of a year or two. Your insurer will then most likely lower your premium.
Property Construction
Coverage rates can be affected by the materials used to build the business property and by how well it is kept. Buildings made of fireproof materials like brick or stone, or businesses with fireproof walls and doors, will cost less to cover than a building made of wood. This is because a property built with fireproof materials is less risky to cover than one built with wood or other materials that burn more easily. Furthermore, having up-to-date fire sprinklers and alarm systems can also help lower insurance costs. Also, newer buildings and those with recently updated electrical wiring, plumbing, and heating, ventilation, and air conditioning (HVAC) systems often cost less to insure than older properties that need more upkeep.
Industry
Commercial property insurance rates can also be affected by how a building is used. A restaurant or welding business has more risks than a flower shop or a dress store due to the nature of the business, so their insurance rates will be higher. Also, a business’s insurance rates are likely to go up if it shares space with another business that has a lot of possible risks.
Property Location
You know that saying, “location, location, location”? It doesn’t just mean pick a busy area with potential customers, it also means pick a safe area. Your insurance company looks at every possible risk, and we do mean every single one. Any possible risks in the area that your business is located heavily impacts your premium. Risks can include the crime rate, how often natural disasters happen in that area, your proximity to oil plants or businesses that use flammable materials. Location doesn’t just negatively affect your premiums, it can also lower them. Your commercial property insurance can go down if your business is close to places where emergency services are readily available. Such as a fire or police station or even just a fire hydrant. Your business being near emergency personnel means it’s more likely they’ll respond quickly and minimize the damage compared to a business that operates further away.
Coverage
How much coverage you need is the main factor in your premium. To find out how much coverage you need you have to find out how much both the building and anything in it are worth. You don’t want to get a coverage limit that is less than what it would cost to replace all of your equipment or the building. For example, if all together it would cost $1million to replace everything you’d need, at least that much coverage, if not more because when it comes time to actually replace everything, more than likely it will be more expensive than you originally planned.
You should also factor in inflation. So, you’ll want to give yourself some wiggle room just in case. It’s also very important to look over the assets on your statement of values at least once a year. This makes sure that as your business grows and changes, the limits of your insurance will still meet your needs.
How To Lower Your Commercial Property Rates
By following a few important tips business owners can save even more money on their commercial property insurance costs. These can make sure that the business isn’t losing money on insurance costs, while still having sufficient coverage.
Review Your Policy
When a business owner wants to find ways to cut their insurance costs, one of the first things they should do is read their policy carefully. Some people will find that they have more insurance than they need, which means they pay for unnecessary coverage. Changes in the business have sometimes made it so that less coverage is needed. For example, a company may have insurance for tools or a vehicle they no longer have.
Pay Premium In Full
You can choose to pay your commercial property insurance premium entirely, once a year or in monthly installments when you buy the coverage. However, paying the full year in advance is cheaper than paying every month.
Bundle
Companies can bundle their insurance plans to save money, just like many people do with their home and car insurance. A business owners policy, or BOP, is a package of insurance plans that many insurance companies offer to small and medium-sized businesses. Most company owners’ policies include general liability insurance, commercial property insurance, and business interruption insurance at a cheaper price. Any business that buys these three policies individually should think about bundling them to save money.
Raise Your Deductible
A deductible is the amount that the insured has to pay out of their own pocket before the insurance company pays the rest of the claim. Deductibles are chosen when an insurance contract is made. But they only have to be paid when a claim is made. By raising the amount of a deductible, you can lower the amount you have to pay out of pocket.
Policyholders need to look over their policies carefully to see if they can pay a bigger deductible for an accident. When you raise your deductible, your insurance costs go down, but you take on more risk. Fees are often charged each time something happens, not just once a year. Find out what a good deductible for your business is by talking to your insurance agent or provider. Increasing your deductible might not be a good idea if you take on more risk than your business can handle.
Minimize Risks
When giving a quote for a commercial property insurance policy, insurance companies look at a number of things. Such as the amount of risk a business faces. There are several safety precautions a business can take in order to minimize their risk to an insurance company. If a policyholder’s buildings and cars don’t already have a security system, they might want to think about buying one. Businesses can also do things like put sprinklers in your building, work area, or warehouse to lower your risks of fire and possibly lower their insurance rates. Modern fire alarms and smoke monitors should also be put in every business building.
Look For Discounts
Even if your insurance company doesn’t advertise discounts, it doesn’t hurt to ask. Policyholders should always talk to their insurance company to find out if they offer deals or if there are other ways that they can save money. Some insurance companies will give you a discount if you stay with them for a long time. While others will give you a discount if you start a safety program.
How EZ Can Help
Every business is different in terms of what risks it faces, how much its property is worth, and how much coverage it needs. Commercial property insurance prices can change a lot from one company to the next. But businesses can still find ways to lower their insurance costs. The first step to lowering your business property insurance costs is to talk to an experienced insurance agent.
EZ can help whether you need group health insurance for your workers or commercial insurance to protect your business. Our agents work with the best insurance companies in the country to make sure you and your workers get the best insurance. In fact, we can find you the best coverage for your budget and save you hundreds of dollars a year. Feel free to call us at 877-670-3538 if you have any questions or enter your zip code to get started on a quote.
