The Lowdown on Lowering Your Premiums

Every small business owner is interested in trimming expenses. When it comes to insurance, however, you don't want to cut costs at the expense of coverage.

The first step in lowering your insurance premiums is to understand how insurance companies base their rates. That way, you can determine what steps to take to safeguard your business and become eligible for the lowest rates. According to the Independent Insurance Agents of America, business owners should consider these steps:

• Maintain adequate lighting throughout your business premises.
• Keep electrical wiring, stairways, carpeting, flooring, elevators and escalators in good repair.
• Install a sprinkler system, smoke and fire alarms and adequate security devices.
• Keep only a small amount of cash in the cash register.
• Keep good records of inventory, accounts receivable and equipment purchases.
• Consider keeping a second set of records off-site, such as with your accountant, insurance agent or at home.
• Make sure your employees have good driving records.
• Make sure your employees know how to lift properly and use all necessary safety equipment, such as goggles, gloves and respirators.
• Consider hiring a risk manager. An outside consultant can advise you of any safety or environmental regulations you may have overlooked.
• Talk to your employees about safety practices.

You may also want to raise your deductible where appropriate to lower your premiums. How high to increase the deductible should be governed by how much you can afford to pay out of pocket. Be careful not to raise it so high that you cannot cover it should a loss occur.

Additionally, use this reference list to make sure all your property is included and covered in your policy.

• Buildings and other structures (owned or leased)
• Furniture, equipment and supplies
• Money and securities
• Accounts receivable records
• Improvements and betterments you made to the premise
• Boilers and machinery
• Data processing equipment and media (including computers)
• Valuable papers, books and documents
• Mobile property such as automobiles, trucks and construction equipment
• Satellite dishes
• Signs, fences and other outdoor property not attached to a building
• Intangible property (goodwill, trademark, etc.)
• Leased equipment