Insurance to Protect Your Business

7. Controlling the Costs

Insurance premiums can be a significant business expense. There are ways to manage the costs.

7.1 Review the risks you insure against.

• Many companies dispense with cover for risks that do not affect their business. For example, a software consultancy may not require goods in transit cover if it does not transport any products.
• Never cut the sum insured, as this will lead to under-insurance and a serious shortfall if you need to claim.

7.2 Increase security.

• Insurers often offer smaller premiums to businesses with good risk-management features.
• A poor claims record may lead to increased premiums. It may even result in your insurer refusing to renew cover.
• A few policies offer no-claims discounts, achieved by not making a claim over a certain period of time.

7.3 Increase the amount you pay towards each claim - the excess or deductible.

• Most policies have a standard excess.

7.4 Investigate the best-value deals.

• Pick a supplier that specialises in your type and size of business or policy need, as they are more likely to offer competitive rates.
• Obtain competitive quotes. But once you have built a relationship with an adviser, it is always worth offering them the chance to match (or better) the quotes.

7.5 Different payment methods could ease cashflow or control costs.

• You can spread costs by paying monthly.
• Find out if you can make savings by buying longer-term cover.