Commerce
The Fatal Mistake, Overcutting Insurance Coverage
It’s never been easy to run a business, and it’s certainly not easy to run a business in the current economic crisis. More and more businesses are shutting down because they cannot keep profits up with expenses. I know what you are thinking, “I could cut my insurance premiums or insurance all together.” Bad idea.
Not a very smart idea. Let me explain why. Insurance is the stable on your business’ back. When your insurance meets a hardship, for whatever reason, your insurance provider is there to back you up. Yet when it comes time to cut costs, insurance is something thought as expendable.
Instead, break down all your policies and reinvent them. By this I mean, change all your policies so they expire at the end of the year. Force yourself to have renew all the policies at the same time, instead of constantly renewing them at different times, all year long. A business is always looking to gain an edge over the competition. How about this edge? When you make all your policies expire at the same time you putting the insurance companies in a bind. You now have the power to influence all the insurance companies to match the price you desire. Insurance companies will practically bend their back, each trying to underbid the other for your service. Use the power to your advantage.
After you’ve changed all your policies to expire on the same day, the power now shifts from the insurance company to the business. You want to know why? Of course you do. Insurance companies want your service. They are willingly to do a lot for it. If you can throw ten, fifteen, or even twenty policies at them, they are guaranteed to fight over them. Allow them to. Sit back and watch them underbid each other.
The approach is much more logical than removing you insurance coverage all together. In fact, removing all your insurance coverage would be one of the stupidest things you’ve ever done.
Always monitor your business and make sure your insurance coverage is not only underexposed but also overexposed. If you hire an independent insurance consultant to handle your insurance coverage, there’s a small chance they might be ripping you off. They’re in a business too after all.
A few simple tips and changes in past ways can save you a large chunk of money while still remaining insured. Never lose hope in your business or your insurance provider.
Have you ever heard the expression, “do not fix it if it’s not broken?” The same applies to business insurance. There are ways to save, but the biggest mistake of them all, is to eliminate it all together or settle for a cheap plan.
Graham McKenzie is the content Syndication Manager at insurance123.co.za South Africa’s leading Commercial Insurance information portal.