Running a business is complex, involving non-stop decisions and expenses. One of those expenses is business insurance. Every business owner has probably felt the temptation to skimp on insurance coverage to lower insurance rates during lean times. But without the right coverage, all your hard-earned equity and assets can disappear if you’re faced with a lawsuit, accident or medical bills.
Rather than put your business at risk, there are steps you can take to lower your rates while maintaining the protection of adequate business insurance.
Make sure coverage fits your current needs.
Businesses shrink and grow. You don’t want to be paying to cover a potential liability you no longer have because you stopped offering that service, or for a piece of equipment you’ve discarded. Also, be aware of the cash value of your business equipment. You may spend $25,000 on a state of the art color printer/copier/scanner, but each year the value of the copier depreciates. That means you should be lowering the amount you insure it for annually. If the copier was damaged and became unusable, most insurance will only pay out its current cash value, not the replacement value.
Raise your deductible.
Just like your personal insurance, your business policy also has a deductible. A deductible is the amount that you agree to pay before the insurance company starts paying. A higher deductible can decrease your premium, but be realistic as to how much you can afford to pay without crippling your business operations.
Lower your workers compensation Mod score.
Workers compensation insurance is required in Wisconsin if you have W2 employees. The Mod score reflects how a business’s workers compensation claims compare to those of employers of similar size and type. The average Mod score is 1.0. Higher than that means you’re experiencing more claims than average, which raises your premiums. Below 1.0 means fewer claims have been filed, which reduces your premiums.
You can take several actions to lower workplace injuries and your premiums. These include safety inspections, robust training for new employees and establishing a workplace safety program that makes all employees aware of potential injuries and how to prevent them. Rural Mutual also offers a 24/7 nurse hotline service to business insurance customers through Medcor. If there’s an injury at work, nurses will advise on how to treat it, if appropriate. Recently, one business owner fell and twisted his ankle while unloading a pickup. He called the hotline and was told to elevate the ankle and ice it, but to call back if it wasn’t better after a day. The employee of another business customer had a similar accident but went to urgent care instead of listening to the same advice. Because of that urgent care visit, the business’s Mod score could potentially rise.
Meet with your agent annually to review coverage.
No matter how busy you are, it’s worth the time to meet with your agent every year. He or she will review the schedules of the property and equipment your policies cover, and their valuations. Agents are specialists in asking the right questions: ‘Do you really need full coverage on that vehicle?’ and, ‘Have you made any upgrades to your property?’ Renovations, such as replacing your roof or, especially to mechanical systems such as plumbing and wiring can lower your premiums significantly.
Bear in mind that Wisconsin requires businesses to have certain types of insurance. Penalties for not complying can be stiff. For more information you can visit the Wisconsin Office of the Commissioner of Insurance website.
Rural Mutual has been protecting Wisconsin businesses for more than 80 years. Contact your local Rural Mutual agent today for additional tips and insights specific to your community, and to find out about the discounts available when you bundle business coverage with other policies.
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