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I have the pleasure of speaking to business owners every day across all different industries, and I can tell you that you’re not alone if you’re feeling the hit of inflation on your bottom line. Costs are rising, and the cost to run your business is increasing, affecting your profitability in 2022.
Today, I’m here to share some good news with you. When everything else around you increases, I’m going to give you some ways to decrease one of your most significant expenses, your general liability insurance policy.
Hey guys, my name is Mike. I’m the co-founder and CEO of Fusco Orsini and Associates, headquartered in San Diego, California, and working with companies across the country. We provide struggle-free insurance and risk management services for busy professionals like yourself. And in today’s video, I’m going to give you five ways that you can reduce the cost of your general liability insurance policy.
TIP #1 TO SAVE ON YOUR GENERAL LIABILITY INSURANCE
Tip number one is to prepare before you seek proposals for your general liability insurance program. Have everything that you need upfront. Make sure you have your operating costs, gross sales numbers, payroll, employee count, and the details of your operations. Make sure you have your loss history and copies of your safety programs.
When you go out to market, your insurance professional needs to have all this information handy so that they can provide the best solution for you without lots of back and forth. Having everything available will help you secure the best cost on your general liability insurance.
SAVE MORE ON GENERAL LIABILITY WITH TIP #2
As I mentioned before, notify your agent and provide documentation of the following:
Personal protective equipment
Anything that you do to improve the safety culture and training at your company (which, of course, lessens the risk to the insurance carriers).
Make sure you provide the above information to your insurance company. It’s so important that are aware of these policies and procedures. When they work on a solution for you, they can apply all the maximum discounts and credits available so that you obtain the best general liability premium.
READ ABOUT MIKE’S 3RD TIP TO SAVE
Here is tip number three on 5 ways to save on your general liability insurance for your business: package your general liability insurance with other lines of insurance, when available. Now, this isn’t possible in all industries. Some industries don’t have the benefit of a commercial package or business owner policy, but many do. And in that case, don’t purchase a standalone commercial property policy. Don’t purchase a standalone general liability policy. Package them together under one roof with one insurance company, and you will save money on each line of coverage.
Business owner policies are preferred. They’re cost-effective, in most cases. Let’s say you’re in the hospitality industry. You can secure liquor liability, business income, commercial property, and other coverage types by purchasing one policy. So make sure you package your general liability with other lines of insurance when available.
TIP # 4 TELLS YOU MUCH MORE!
Number four, hire a great independent insurance agency to work on your behalf. Now I might be biased. Of course, I’m the co-founder, and I’m the owner of an independent insurance agency. Still, I would not have started this business if I didn’t think the independent insurance channel was the best solution for our clients. We have access to various insurance policies, various insurance programs, and various insurance companies. Because of that access, we can go out to the market on your behalf. We can gather multiple proposals for you to compare and contrast coverage. An independent agency will provide options to you in one place rather than going to many companies and seeking bids from several professionals.
Independent brokers serve a great need. They’re usually very niche-focused, so find an independent agency that knows your business, what you’re doing, your product, and how they can best serve you. Independent agencies have special appointments and special contracts with insurance companies that can deliver the best solutions for you. So make sure you hire a reputable independent insurance agency, and a broker you trust and know can help you the most.
LAST BUT NOT LEAST; TIP #5
And number five, don’t underestimate your business activity going into the policy year. Don’t undercut your gross sales, payroll, subcontractor costs, or other activity in your business, thinking that you’re going to save money. You’re not. It’s going to cost you more money in the long run. You’re not painting the correct picture about the size of your company and what solutions may be best for your company. Higher gross sales don’t always mean that your insurance program will cost more money. When you have higher gross receipts and higher gross payroll, your net rating basis is often better than when those numbers are lower.
And remember insurance companies audit. They’re going to audit your policies. Don’t forget this. People think that this is not going to happen. Insurance companies are going to audit your policies. I don’t care if it’s the general liability; if it’s workers’ compensation, the insurance company will find out your exact exposures. They’re going to true up at that point, and they’ll charge you what you would’ve paid, in some cases even more, because when you undercut, you increased your net
rating basis, and now you’re going to spend more money on your premium.
So don’t undercut; it doesn’t help.
There are five tips about how you can save on your general liability insurance policy. I understand business owners need to save money anywhere they can. Insurance is a direct hit to your bottom line. So why not use these tips?
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