10 Tips On How You Can Reduce Your Liabilty Insurance
Don't Buy on Price Alone
No two insurance policies are identical. When comparing the different products on offer, don’t just select the cheapest one. Consider such things as the scope of cover provided, the fl exibility of the product and the reputation of the insurance company.
What might appear, at first sight, to be a good deal may end up costing you far more money in the long-term.
Consider too, the specialist knowledge and experience that your insurance broker has of each insurance product required.
For example: business
liability insurance is the area of specialist expertise in which ‘Dandelion’ works. Other brokers may specialise in property or vehicle insurance or whatever.
Check the Insurance Company's Financial Strength
Always ask your broker for the financial strength rating of whatever insurance company he/ she recommends. You’re entitled to some assurance that your new insurance company has the resources to pay any claims that arise.
Focus on Health & Safety
The best way to achieve substantial savings on your liability insurance bills is to invest in accident prevention. Nothing else delivers the same level of sustained, long-term cost reduction.
Consider safety expenditure as a long-term cost-cutting investment because
accident prevention measures really do pay for themselves over and over again.
Tell Your Insurance Company About Your Business
If you want to obtain a good insurance quote, you must be willing to
give insurance companies plenty of information about your business. They need this to properly assess the ‘risks’ they are taking on.
Among other things, they’ll need to know the sort of work you’re doing; your company’s history; your management team’s experience; what, if anything, you are doing about safety; your insurance track record and so on.
If you don’t provide the insurance company with this level of detailed information, you simply won’t obtain the best possible deal.
Naturally, the information you give the insurance company must be 100% accurate. If it’s not, you could invalidate your insurance cover.
Stay On Top of all Outstanding Insurance Claims
When you go shopping for insurance cover, your ‘insurance claims record’ – good or bad – is always of paramount interest to insurance companies.
Insurance companies view ‘outstanding’ claims far more negatively than ‘settled’ / ‘closed-off’ claims so it is in your best interests that any such ‘outstanding’ claims /incidents are quickly settled (or otherwise disposed of). The most effective way of making this happen is to have regular meetings with the insurance company's claims handling staff.
Firms with ‘outstanding’ claims are penalized in two ways: they pay far more for their insurance, plus they have
trouble switching to another insurance company (
i.e. they’re effectively locked into their existing arrangements until they get on top of their outstanding claims).
It Pays to Be Active
Most firms only think about their insurance costs when the annual policy renewal bill arrives, and while they may complain about the cost, they usually pay up.
Insurance is a major annual overhead and it pays to keep it under active consideration all year round. Ask your broker to explain the different ways of reducing your insurance bills; shop around regularly; and if needs be, ask a second broker to check the market for you.
Remember: ‘Dandelion’ can help you to secure the best possible insurance deal at your next renewal date
Make a Diary Entry Now to Keep Ahead
If you’re shopping around for insurance, allow yourself plenty of time. Start at least three months before your existing insurance policy runs out. Put a note in your diary now to remind yourself of the date.
Better still, why not register your details with ‘Dandelion’ now and we’ll contact you in advance of your renewal date?
Take Charge
Overall responsibility for insurance costs should remain firmly within the senior management team. It’s not something that should be delegated – not even to your insurance broker. It’s far too important for that.
Do a 'Value for Money' Check
Most brokers are paid 8% - 10% commission by insurance companies on whatever liability insurance business they place with them, and property insurance business typically attracts a commission of 12½% - 15%. Usually this commission is automatically included in the premium that’s charged out to the client.
In addition to ‘standard’ commission, some insurance companies pay brokers an extra 2% - 4% ‘override’ commission. This ‘top-up’ override commission is paid where, for example, the broker's overall account (which may include your policy) with the insurance company is performing well.
Some brokers also charge clients fees on top of whatever commission they’re receiving from the insurance company
With all these potential 'add-ons' it could be well worth your while to ask your broker to confirm, in writing, what he’s being paid – by way of standard commission, commission ‘overrides’ and fees – for handling your business. You will then be in a position to decide whether you’re getting genuine value for money.
Consider Switching to a Broker who Charges a Fixed-Fee Instead of Commission
The system of insurance companies directly paying insurance brokers by ‘commission’ has rightly
attracted a good deal of criticism from consumer protection bodies. Because of this, some brokers now offer a ‘fee-based’ service whereby you pay the broker an agreed fee for his work and he gives you back whatever commission he would otherwise receive.
‘Dandelion’ works on a fixed-fee basis. We’re not paid ‘commission’ by insurance companies. Instead, we charge each client a reasonable fixed-fee for our professional service.
