Cheap Commercial Insurance Is Gaining in Popularity

The recession has forced many businesses to cut down on costs. They have looked to do so by lying off people or by cutting down operating costs. One of the casualties that have become a victim of the recession is insurance. More and more people are now looking to purchase cheap commercial insurance policies, hoping that the premiums would come down and help them save some much wanted money. While some businesses have preferred to ignore the aspect of purchasing such policies at cheaper prices, others have made a beeline to any insurer who is willing to offer cheaper insurance.
 
People can never be denied an option to cut down on costs, if they are facing difficult situations. This is something that all people do whenever they face difficulties of any kind. Businesses or owners of businesses are no different in this matter and will also be looking to try and cut down on any costs which may look excessive. These people would definitely want to get the best contents insurance deals, which are available in the market. Perhaps this is one of the reasons why cheap commercial insurance has been gaining in popularity over the past couple of years.
 
Taking a casual look over the print or electronic media, it is not difficult to find a number of advertisements placed by insurance companies that are trying to sell commercial insurance to businesses. The recession has not spared insurance companies either, as they too have been seeing a fall in business and trying to find ways to help stabilize things. These companies were left with no options but to cut down on the prices of insurance policies, which were sought after by businesses. They could no longer command the same kind of prices as they were doing earlier. This realization by insurance companies made it easier for business owners to find more offers for cheap insurance.
 
Owners of businesses did not have to run from pillar to post in order to search for cheap commercial insurance.

Identifying Insurance Risks For Commercial Insurance Brokers Risk Management

Risk management is the Commercial Insurance Broker’s role in assisting his client company to identify and manage the risks that threaten it.

This help may include the identification and evaluation of those risks, so that correct action can be taken to limit their effects or to provide for the cost of loss.

Many risks can only be eliminated completely by incurring unacceptable costs or inconvenience, but it may be possible to reduce them to an acceptable scale.

Loss control measures may operate to reduce the probability of loss – fire-resistant partitions – or to reduce the severity of loss once it occurs – for example by the installation of sprinklers.

Although a risk has been controlled in this way, there may still be a residual risk which would be too great to be borne comfortably by the company.

In such cases, the risk may be transferred by insurance or financed when it occurs, either by raising loans or by meeting it from the company’s own resources. This may be done by establishing a self-insurance fund from which losses can be paid as necessary.

The modern Commercial Insurance Broker must be prepared to advise his client not only on insurance matters but also on loss prevention and on these alternatives to insurance.

Larger companies will almost certainly employ a risk manager or insurance manager, and his knowledge of the company’s operations may relieve the broker of much of the basic investigation of the client company’s insurance needs.

The risk manager is himself an insurance specialist, and can be expected to take over much of the broker’s task to act as an interpreter between the worlds of industry and insurance. The commercial insurance broker is not, however, relieved of his responsibility to suggest new covers, or new forms of old ones, and to point out needs which appear not to have been met.

The Business Insurance Broker, looking at the company from the outside, may see things that the risk manager has missed, and the broker’s connections with the insurance market, which are likely to be more extensive and more frequent than those of the risk manager, may suggest innovations or lines of enquiry which may result in a better insurance programme for the client.

A large company will probably have overseas operations, and will wish to co-ordinate the insurance arrangements of all its branches and subsidiaries as far as possible.

This means that the broker must be able to provide service, either through his own insurance brokerage or through a network of correspondent brokers, wherever his client may be operating.

The emphasis with larger clients is likely to be on catastrophe risks – perhaps the threat of fire or explosion to a vast industrial complex, the risks of a major construction contract, or the possibility of a huge award being made in a products liability case. In cases such as this, the broker may have to go to markets beyond the British one in order to find sufficient capacity.

The Commercial Insurance Broker who has large companies and multinationals as his business clients cannot therefore think in purely national terms.

Many large clients these days are interested in forming an insurance subsidiary – a so-called ‘captive’ insurance company – usually in an offshore tax haven. The broker’s role thus becomes extended to carrying out a feasibility study on such a proposal, advising on suitable locations, and setting up, managing and arranging reinsurance programmes for the captive.

Avoid 5 Common Commercial Insurance Mistakes

What follows are five commercial insurance mistakes I see consistently that cost businesses money, yet they are easily avoidable:

Commercial Insurance Mistake #1 – Tolerating Waste

This one is easy to identify. If you have a billion dollar property schedule, and you buy a billion dollars worth of insurance, even in this soft market you’re wasting money. Have a PML Study done to determine the appropriate amount of insurance to buy. Even if you double that amount in order to sleep you are better off.

Commercial Insurance Mistake #2 – Not Shopping Enough

Some people have kept the same insurance broker for 20 years. I know of at least four major commercial real estate companies with long term relationships that pay more to their insurance broker than a) they know, b) the broker is telling them, and c) is appropriate for the amount of work.

Fidelity and transparency are the order of the day. There are certainly ways to keep a broker honest.

As an example at SIG, we regularly check the marketplace to insure that our clients are in the best and most competitive market. Are you confident that your broker is doing the same with your bottom line in mind?

Commercial Insurance Mistake #3 – Shopping Too Much

On the other hand, It is definitely possible to shop your insurance too much. There are certain companies that illicit an instant groan from an underwriter at their mention. These companies are playing the game incorrectly. (Inevitably, these are the same companies that end up hiring a risk management consultant, thus incurring more expense, and oftentimes making a bad situation worse.)

A paradigm shift, and a new understanding of their situation, can make all the difference in the world while also saving them significant insurance dollars.

Commercial Insurance Mistake #4 – Website That Raises Red Flags

I see plenty of websites that are right out of an underwriters nightmare. (More underwriter groaning here) Youve got pictures of guys on your website walking around in ankle deep water, shouldering over 75 lbs, while carrying a razor sharp knife, and not a cut glove in sight? Really? (I cant make this stuff up, by the way).

They ask for your web address right before they ask if you have a safety program in place on a standard insurance application. Do not raise unnecessary red flags with the design and images on your website.

Commercial Insurance Mistake #5 – Not Negotiating

You are making a major commercial insurance mistake if you do not negotiate. Nowhere is the old saying “everything is negotiable” any truer than in insurance.

EVERYTHING is negotiable. Even your losses. Especially your losses. Negotiate!
Remember: you want to make sure that you align yourself with agents that are going to have your best interests in mind, and who have the skills and know-how to give you the most coverage for the least amount of money possible. Make sure that you do your homework and make the right choice the first time. But if you dont, never hesitate to correct your mistake as soon as you realize it.