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10 Ways to Save Money on Your Insurance Program
By: Kenneth C. Hegel, Jr.
Posted: June 23, 2008, from the April 2006 issue of Skin Inc. magazine.
It is easy to appreciate and understand the importance of carrying a comprehensive commercial insurance program in order to offer protection in the event of a loss or claim. Very few people would dispute that insurance is a crucial part of managing a business, and that the lack of a solid insurance program could be detrimental to a company and its employees during a time of loss. Insurance often is classified as a necessary evil or an expense that simply cannot be avoided. Much of this belief stems from the fact that the average insurance buyer feels powerless when it comes to keeping costs down. However, contrary to popular belief, as the insured, you can help to determine the price of your premiums by following a few simple guidelines.
Evaluate and understand your true exposures
Because property premiums are derived partially from the amount of property to be covered, it is very important that you provide your insurance carrier with an accurate account of buildings, inventory, personal property and any additional costs your spa would incur in the event of a loss. Underestimating these factors can mean that you, as the insured, would have an inadequate amount of coverage. Overestimating will result in additional costs that are unnecessary to the business because the insurance company only will pay for the actual cash value or, in most cases, the replacement cost of the insurable property. Remember, insurance exists solely to restore an insured to the financial status that existed before a claim was filed. A person never should profit from a loss. Why pay premiums for limits that never will be afforded to you during times of trouble?
Invest in protective devices
Burglar alarms, smoke detectors and sprinkler systems could help your spa avoid a loss, or lessen the damage should one occur. Insurance companies often will offer certain credits to businesses that have one or more of these devices in place, thus resulting in lower premiums. Supply the insurer with photographic or videotaped evidence that these items are present throughout your facility in order to obtain these possible credits.
Combine policies or lines of coverage
Some insurance companies will provide discounts or issue credits on premiums to owners who carry more than one line of insurance with that company. A perfect example is a package policy, which is when both the property and the general liability coverage are listed on one policy form. In some instances, the insurer will issue a package credit, which could yield lower premiums.
Consider higher deductibles
Carrying a higher insurance deductible and retaining a larger portion of the risk can help to lower insurance premiums. Keep in mind that, by doing this, you will be assuming a greater portion of a covered loss. Give serious thought to this fact very carefully before approving a larger deductible.