Can I Get a Discount for Running a Safe Business?
Insurance is a system of pooling risk. Every member of the pool pays according to how much risk they carry, and how much coverage they want to get out of the pool. Those with more risk are more likely to draw from the pool, so they pay more because of that likelihood. Those who do make a claim see their premiums rise even higher because they have drained some of the pool, and they have proven themselves to be higher-risk.
The less likely you are to drain the pool, the lower your premiums. Taking safety measures in your business earns you lower premiums. Business liability insurance costs can be quite expensive, so any savings benefits your company. You want to keep your employees and customers safe for the benefit of everyone.
As with any form of insurance, there are some factors that are out of your control. Businesses that employ drivers or use heavy machinery will always pay more than a retail or service company because their employees are at higher risk. But there are also plenty of factors that you can influence to lower your rates. Talk to your trusted local insurance agent for more suggestions of what you might do to lower your rates.
Safety Measures for Lower Rates
A safer business starts with clear guidelines and management who enforces those workplace rules. Over time, a business can prove itself low risk by avoiding making claims. A well-enforced handbook can prevent many accidents from happening. Larger companies might consider hiring a risk manager to oversee a safe workplace and deal with violations of the safety rules.
Companies who employ drivers--like commercial truckers, shuttle drivers and people making service calls--are at some of the highest risk. Their employees are not only at risk of damaging company property and hurting themselves, they can also be the cause of injury or even death to other motorists on the road. Liability is of particular importance for these businesses. Some of the rules to establish and strictly enforce include obeying the speed limit, banning cell phone use while driving and having a zero tolerance policy for any moving violations.
Jobs that require physical labor or working with hazardous materials run the risk of having to pay worker's compensation and disability when employees are injured on the job. Regular training sessions and best practices evaluations show dedication to employee safety and reduce careless accidents. It is imperative that businesses follow federal, state and local laws regarding employee safety and safe handling of chemicals.
Your building is also covered under your business liability insurance. You can lower your risk of structural damage by fire or other incident and your risk of theft by making minor improvements. Adding smoke detectors and alarm systems earns you automatic discounts. Employing a security service can also reduce your rates.
Your location makes a difference as well. Businesses in high-crime areas are at higher risk of burglary and vandalism. Newer construction is often considered less risky than old buildings since bad wiring and old pipes can cause damage to the structure. Close proximity to police and fire stations lowers your risk because emergency response time is shorter. If you are seeking out a new location, consider these factors to keep your rates reasonable.
Ultimately, the same good business practices that keep your assets and employees safe will also lower your insurance limits. Your insurance agent can recommend safety measures to earn you business insurance discounts. Even when you make positive changes not suggested by your agent, documenting them might knock a little off your monthly premiums.
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