Reducing insurance costs

Are you paying too much for insurance? If you’re like most companies, the answer is yes, and you are looking for ways to cut those costs.

“You don’t want to trade dollars with the insurance company because the insurance company usually wins that game,” says Bill Goddard, director of insurance consulting at Brown Smith Wallace LLC. He serves as an independent insurance consultant, advising companies on where they can cut insurance costs while best protecting their businesses.

As a CEO, you probably don’t have time to burrow through the paperwork and translate the small print to determine whether you’re getting the best deal and buying enough protection for your business. Business owners without an in-house risk manager don’t have the time or expertise to gather and analyze bids, and that’s where an independent insurance consultant can help. Businesses can engage this type of expertise and essentially have an on-call risk manager to help them identify insurance savings and ensure they are protected.

Smart Business spoke with Goddard about how to identify the most cost-effective way to buy insurance and protect your company, and how an independent consultant can help you do both.

What factors do business owners overlook when purchasing insurance?

Most companies go through the process of bidding their insurance. However, just bidding your insurance doesn’t guarantee you end up with the most cost-effective program. There are hidden costs that business owners might not recognize.

Also, business owners often do not take deductibles that are right for their business. Each business has its own risks, some unique, and an analysis by an independent adviser (someone not selling insurance) can help you identify the correct coverage and cost for your business.

What questions should a business owner ask when evaluating insurance options?

To make sure you buy enough protection in the right areas for your business, consider these questions: Do you have business interruption coverage that will protect your income? What if your business burns down? What if one of your suppliers’ buildings burns down and prevents you from doing business?

Do you have safety programs in place that can reduce the cost of workers’ compensation coverage? Are there people enrolled in your health insurance plan who are not eligible? Do you have the right health insurance plan design? Does your health insurance plan design encourage employees to be smart consumers?

Does your company provide wellness programs that can reduce the cost of medical premiums? Is your third-party claims administrator paying claims properly? Can this person be more efficient? Getting insightful answers to these questions can lower costs and ensure that you have proper protection for your business.