8 WAYS TO SAVE MONEY ON BUSINESS INSURANCE. Reduce Your Risk While Saving Money

Transcription

1 8 WAYS TO SAVE MONEY ON BUSINESS INSURANCE Reduce Your Risk While Saving Money

2 Reduce Your Risk While Saving Money Few businesses have the financial resources to self-insure against large risks, such as liability and the protection of business assets. Whether you re getting business insurance for the first time, or you re looking to improve your existing coverage, it will likely benefit you to take the time to investigate all of the options at your disposal to keep your costs down. Ultimately, insurance should help you manage risk cost-effectively and not be something that requires you to spend so much that buying insurance becomes a hardship in itself. So, before you scramble to find the money to pay the latest business insurance premium that you ve been presented with, check this list of ways to save money on business insurance and see what you can do to reduce your business insurance expense. 1) Be Best in class To get the best possible rate and coverage for your needs, you must make your organization stand out in comparison to others in your sector. In insurance terms this is called best in class. You can achieve this by taking an active role in the insurance buying process: Create a relationship with your Insurance Broker. The more your broker knows about your operation, the better prepared they will be to present your organization to Insurers. Your broker should work with you to ensure that your application is complete and well organized. Be sure to include any information about your risk management policies and procedures. Include any documentation or information that helps set you apart or makes you unique. Align yourself with a broker who can help provide key underwriting information which will promote your organization to the underwriter and help it be recognized as best in class. 2) Appropriate Deductibles - Accurate Inventory Levels and Building Values Go through your existing business insurance policy with a licensed Insurance Broker and identify areas of possible premium containment. For instance, are there deductibles that you can increase to lower your insurance rates? If you are carrying fleet or vehicle insurance, you may assess whether you wish to carry collision insurance on certain older vehicles. Review inventory levels that you keep on hand and discuss stock reporting and peak season options. Perhaps your building values or revenue have fluctuated due to market conditions and the current state of the economy? These two figures, if not accurately reflected to your Insurer, can affect the annual premium you pay. Are adjustable premiums right for your organization talk with Mardon Insurance to find out. 2

3 3) Take advantage of group rates by purchasing your business insurance through a customized Property & Casualty Group Insurance Program Some insurance brokerage s, including Mardon Insurance and Mardon Group Insurance, already have established customized Property & Casualty Group Insurance Program s in place for certain business types. In fact, Mardon has extensive experience in providing customized insurance programs for associations and organizations where most Insurance Brokers do not have this specialized knowledge, expertise, and industry access. Typically such a program will provide each participant with superior coverage at more competitive pricing. By combining the insurance purchasing of many similar businesses into one program with one insurance company through one broker, the resulting economies of scale and volume discounts can provide greater value to each business owner. If you belong to an association, franchise or member-based group and you re interested in learning more about this type of insurance opportunity, please contact us to learn more. 4) Lower your liability risk as much as possible An experienced broker can identify and measure risks, propose adjustments and suggest various possible options of insurance products all with the goal of protecting your balance sheet and reducing your costs. Consider discussing with your broker topics such as quality control, contractual transfer, site inspections, or other loss control measures. These discussions may help identify and assess liability risks, assist you with containing them and effectively communicate those liability risks to underwriters in an effort to fairly present your organization for the best possible rating. 5) Risk Management Managing risk is good business sense. It is one of the most important things you can do to maintain the viability of your organization. An effective risk management strategy provides the opportunity for better pricing on your insurance premiums, saves you out-of-pocket costs like deductibles and ensures a safe and stable environment for your employees and customers. An effective risk management program also helps you to understand and be prepared for the risks you face before losses occur. That preparation can mean the difference between an organization that thrives and one that fails. Whether it is a structured plan or a more informal guideline you follow, risk management seeks to preserve an organization s continued ability to perform its mission, grow, maintain good health, and preserve its social responsibility to the entire community. 6) Finance Annual Premiums Consider financing the annual premiums associated with the policy. This will spread the cash flow expenditure over the year rather than taking the expense all up front. In fact, some Insurers will even finance the annual premium and not charge interest to do so which could end up saving you some money each year. 3

4 7) Adjustable Insurance Policies Ask your broker about adjustable policies that return premium dollars in the event that estimated revenues for the fiscal year don t meet expectations. 8) Work with an Experienced, Independent Insurance Broker These are only some of the things you can do to save money on the cost of commercial or business Insurance. A professional Insurance Broker who is experienced and independent should be able to survey the market for insurance that best suits your needs and budget. An Insurance Broker that is large enough to have access to many different insurance companies, and that is not owned by any particular insurance company, may be most beneficial. BONUS SECTION Do You Have The Business Insurance You Need? Do you have the business insurance you need? You personally cannot control or eliminate every potential risk that threatens the success of your company. Business insurance can provide the protection against many of these risks if you carry the right kinds of business insurance for your operation. Unfortunately, insuring your business is not as simple as insuring your car or home. Because your business is unique, you ll need to design a package of insurance with your Broker that meets your business needs and provides the level of protection you re comfortable with. Your first decision is to determine which types of insurance your business needs. On the following pages, we will summarize the types of business insurance that small businesses might need, including property insurance, liability insurance, and business interruption insurance. Also, Cyber Liability Insurance is a newer type of coverage designed to provide protection in a technologically dependent world. Part 1: Property Insurance Property insurance protects the assets your business owns, including the building, equipment and stock from destruction or damage. Even if you run a home-based business and have home insurance, you ll need to protect your business assets with a separate insurance policy because your homeowner s policy will likely not cover business property. To determine how much business property insurance you ll need, create an itemized list of your business assets and their individual dollar values. Some business owners stop here but there are other types of insurance that prudent business owners will also want to consider purchasing to protect themselves from incurring the kinds of losses that can 4

5 close their doors. One of these additional types of business insurance is called business interruption insurance. An earthquake, wind storm or ice storm are just three examples of an unforeseen natural disaster that could force you to suspend your business operations. There are also floods and fires, too. Or, on a more likely level, your business could be the victim of fire, vandalism or theft. Business interruption insurance protects you from the loss of revenue incurred when you re forced to close down. Part 2: Liability Insurance What other types of business insurance do businesses need? Liability insurance, no matter how small the business, is a type of insurance no business should be without; its purpose is to protect your business in the event it is sued. Commercial General Liability (CGL) insurance protects your business from liability arising from negligence that may cause injury to others, such as a customer or employee. It also protects your company if someone is injured as a result of using your product or service. When you consider that the legal expenses and settlement or judgment expenses of a single lawsuit could drive your business into bankruptcy, you ll see why this kind of insurance is considered a must-have. If you sell manufactured or assembled goods, check whether or not your general liability insurance policy also covers product liability. If not, you ll want to add this type of specific liability insurance to your package. If you re a professional, such as a doctor, lawyer, architect, accountant, computer consultant, or realtor, you should also consider carrying professional liability insurance. Various types of professional liability insurance range from malpractice insurance for those in the health professions to errors and omissions insurance for business professionals. If in doubt about what kind of professional liability insurance you should be carrying, consult your provincial professional organization. In some provinces, professional liability insurance is mandatory for certain types of professionals. Part 3: Cyber Liability Insurance As technology becomes more relied upon to operate a business efficiently and effectively, the importance of an appropriate Cyber Liability Insurance policy will only continue to increase. The reality is that there has been a tremendous rise in the potential risk that businesses now face because of the vast amount of data stored and transferred electronically. In 2015, just one stolen laptop or one hacked account can potentially put at risk the personal data of all of your customers which is why protecting your business from cyber liability is just as important as the more traditional exposures businesses face. Why is Cyber Liability Insurance Necessary? Unfortunately, a traditional Commercial General Liability policy will likely not protect against most cyber exposures. Traditional CGL policies are designed to insure against bodily injury and property damage and will do little, if anything, to protect you and your business from electronic damages and the associated costs you may suffer. Being aware of the possible cyber liabilities your company faces is crucial before beginning to manage your risk which should include carrying the proper insurance coverage. 5

6 Since we ve highlighted what isn t covered by a traditional Commercial General Liability policy, let s now look at possible occurrences that are covered by a typical Cyber Liability policy: Data Breaches Today, companies have a greater responsibility than ever before to protect clients personal information. In the event of a breach, notification of the affected parties is now required by law in Alberta, and could become required in other parts of Canada in the future. This will add to costs that will also include security fixes, identity theft protection for the affected parties and protection from possible legal action. While companies operating online may be at a greater risk, even companies that don t transmit personal data over the Internet, but still store it in electronic form, could be victimized by data breaches through electronic information lost to unauthorized employee access or hardware theft. Cyber Extortion Believe it or not, hackers can hijack websites, networks and stored data and then restrict access to you and/or your customers. The hackers will then often demand money to restore your systems back to working order. Not only can this cause a temporary loss of revenue and generate costs associated with paying the hacker s ransom, but there could be damage done to your network and there might be a cost associated with rebuilding it and getting your organization operational again. Damages to a Third-party System You could be held legally responsible for damages caused by an sent from your server which has a virus attached to it and that subsequently crashes the system of a customer. In similar fashion, if the software your company distributes fails and results in a loss for a third party you could be held liable for those damages too. System Failure A natural disaster, malicious activity or a fire could all cause physical damages that could result in the loss of electronic data. While the physical damages to your hardware may be covered under your existing business insurance policy, data loss due to the incident would generally not be covered under that policy. Business Interruption If your business activities require the use of computers, a disaster that limits your ability to send data could cause you, or a third party that depends on your services, to lose revenue. Whether it s a server failure or a data breach, incidents like this can negatively affect your operations. Resources that normally would have gone elsewhere may need to be directed towards the problem and that could result in further losses. This is especially important as denial of service attacks by hackers as previously mentioned has been on the rise. Intellectual Property Rights Your company s online presence, whether it be through a corporate website, blogs or social media, opens you up to some of the same exposures faced by publishers. This can include libel, copyright or trademark infringement and defamation, among other things. 6

7 Cyber Liability Insurance is specifically designed to address the risks that come with using modern technology - risks that other types of business liability coverage simply won t cover. The level of coverage your business needs is based upon your individual operations and can vary depending on your range of exposure to an occurrence or loss. Conclusion Being a successful business person means being able to anticipate events and plan for the future. Business insurance is one way of ensuring that you re in control of your future rather than being controlled by it. Unfortunately, there is no generic plan that will meet every business needs. You ll need to shop around, just as you would for any product, to get the business insurance that s most suited to you. Mardon Insurance Professional. Brokers. Since 1928 Founded in 1928, Mardon Insurance continues its tradition of providing consistent, quality advice on an extensive range of insurance products. We have fully independent insurance brokerages conveniently located throughout the Lower Mainland. Mardon Insurance is not controlled by any Insurance Company. Representing some of the largest international, national, and regional insurance companies in Canada, we are able to offer you a selection of the most comprehensive insurance packages available and to find the best value for your needs. Drawing on a wide background of education, training and experience from our extensive team of licensed insurance professionals, we can provide a comprehensive individual analysis of your insurance requirements. As a valued client of Mardon Insurance, we will work closely with you to ensure that your changing insurance needs continue to be met. Insurance is complex and we are insurance professionals. Our Approach to Insuring Businesses In the increasing complexity of today s business world, there are many things that could keep you awake at night, but your insurance does not have to be one of them. Whether you have a small business or a large manufacturing plant, we can help you to steer a path clear of the ever-present risks. Insurance is one of your best tools for managing the unexpected and controlling the effect it has on your business. Professional insurance advice and analysis will help you to understand the potential risks facing your business and to choose the right coverage for your needs At Mardon Insurance, our highly trained team is prepared to meet with you to discuss all aspects of your business to ensure that you are properly covered. Some areas we specialize in are Manufacturing & Wholesale Operations Retail Stores Service Sector Contractors (including bonding) 7

8 Areas we specialize in (continued)... Course of Construction & Wrap Up Liability Professional Liability Care Home / Retirement Homes / Seniors Care Directors and Officers Liability Golf & Country Clubs Marine Property Owners (Landlords) International Risks Farming and Farm related operations Automotive repair, service Fleet & Transportation Armoured Cars & Security Companies Associations & Employer Groups Property & Casualty Insurers represented by Mardon Insurance include: AVIVA Insurance Group CNA Global Continental Casualty Company Canadian Northern Shield Chubb Insurance Company of Canada Dominion of Canada General Insurance Company Economical Mutual Insurance Group Family Insurance Solutions Federation Insurance Company of Canada Gore Mutual Insurance Company of Canada Intact Insurance Company of Canada Insurance Corporation of British Columbia Lloyds of London Mutual Fire Insurance Company of BC Optimum West Insurance Company Peace Hills General Insurance Company Royal & Sun Alliance Insurance Company Travelers/St. Paul Fire & Marine Insurance Company Wawanesa Mutual Insurance Company Zurich Canada 8

9 Brokerage Awards Mardon Insurance (Richmond) Winner many years of Best Insurance Brokerage in Richmond as voted by the readers of The Richmond News newspaper. Mardon Insurance (Coquitlam) Winner many years of Best Insurance Brokerage in the Tri-Cities as voted by the readers of The Tri- Cities Now newspaper. Mardon Insurance (White Rock) Past Winner of Best Insurance Brokerage in Surrey as voted by the readers of The NOW Newspaper in Surrey. Mardon Insurance (White Rock) Past Winner of the Business Excellence Award as voted by the White Rock/South Surrey Chamber of Commerce. Offices Mardon Insurance (Coquitlam) Lougheed Hwy Coquitlam BC V3B 1C5 P F Mardon Insurance (Vancouver) 715 W 16th Ave Vancouver BC V5Z 1S8 P F Mardon Insurance (Vanguard Division) 715 W 16th Ave Vancouver BC V5Z 1S8 P F Mardon Insurance (Richmond) Steveston Hwy Richmond BC V7E 2K2 P F Mardon Insurance (White Rock) Unit King George Hwy Surrey BC V4P 1A5 P F Mardon Group Insurance W. Pender St Vancouver BC V6C 2V6 P F The purpose of this report is to provide information about industry trends and news of general interest to our clients, potential clients and other professionals. Information about product offerings, services, or benefits is illustrative and general in description, and is not intended to be relied on as complete information. While every attempt is made to ensure the accuracy of the information provided, we do not warranty the accuracy of the information. 9