Business Insurance

Every business needs insurance, but how do insurance companies work out your premium and what can you do to keep it as low as possible?

The The most An important factor when insurance companies calculate your business insurance premium is the type of business you’re in. There’s not a lot you can do about the risks involved with profession, but there are five simple ways that every business can keep their insurance premiums to a minimum:

Beef up security. Firstly, you need to look after the physical security of your business assets. Secondly, you need to protect your company data.
Regular health & safety audits
Make fewer claims.
Risk management and quality control procedures.
As a last resort, if your premiums are still too high, you could think about changing your line of business.

How are premiums calculated?

Premiums for employer’s liability insurance are calculated by charging a certain amount per employee (also impacted by the nature of work)

The best way to keep your employer’s liability insurance premium down is to ensure the working environment at your company is as safe and comfortable as possible. Depending on what business you’re in, this could involve either regular training sessions on how to operate machinery or checking that the ergonomics of the work space (correct posture, where the monitor and keyboard are placed and so on) are up to scratch.

Public liability

For small businesses, the amount charged for public liability insurance is determined purely on the kind of work you do.

However, other factors sometimes taken into account are your claims history and any risk management procedures that you have in place.

Professional indemnity

Insurers use several rating factors to determine what to charge for these premiums. The most important rating factor, as with employer’s liability and public liability insurance, is the type of work you do.

There’s not much you can do to change the inherent risk associated with your profession, but there are some factors that you can control.

NOTE: The claims history of your organisation will be very important.

If you have a well-defined audit trail or use critical diary date systems to assess deadlines, then an insurer will often reduce premiums for professional indemnity cover.

Larger firms are generally charged more. Usually however, the bigger the firm, the lower the premium is as a percentage of turnover. This means that very small firms can sometimes pay rather a lot in insurance charges as a percentage of their turnover.

Like most insurance policies, business insurance is a necessary evil, and often a legal requirement, but there are some simple, common sense ways to keep your monthly premiums as low as possible: Train your staff properly, maintain a healthy, safe workplace, keep your property secure and ensure that your product is as high quality as you can make it.

Contact your local Accredited Partner for further details.

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