In recessionary periods it is common practice for companies to downsize their operations. Downsizing would naturally include both your physical assets and personnel. Taking stock of your insurance requirements and re-evaluating your policy coverage should also be included in your downsizing strategy. And, even if you are not downsizing in the immediate future every business owner ought to take a close look and audit their insurance package anyway. If you are wondering why you should bother, the reason is simple: You could be missing out on some substantial savings!
Let’s elaborate further on the two main reasons you might want to audit your insurance coverage:
- Paying for what you don’t need – If you are selling off assets then simply put, you don’t need to be paying for the insurance coverage. Similarly, if you’re reducing personnel then you don’t want to be paying for unnecessary Workers Compensation coverage, do you? If your policies are based on the value of your current assets then you will want to re-adjust your coverage and save on the premiums in the process. You might even use some of the premium savings to boost your EPLI coverage because laid off workers are not only disgruntled, but litigious minded when the pink slip lands on their desk.
- There are bargains out there – Even insurance companies have to compete vigorously in a recessionary marketplace. Better deals can be obtained if you shop around. If you cannot find better competitive prices for your premium dollar, you will likely find alternative policies that offer better coverage for the same premium.
Start with an audit
Contact your insurance broker to help you perform a full insurance audit of your current situation. Think about your needs down the road by considering best and worst case scenarios. Don’t procrastinate and wait until the last minute when your policy is about to expire. An audit is best performed a few months prior to your policy expiration.
Ensure that your broker also comes back with other quotes from your insurance carrier’s competitors. This will at least prompt a very competitive bid from your current insurance carrier. They want to keep your business.
Remember to re-evaluate your insurance deductibles
When reviewing your policies don’t forget to review your current deductibles. If you are prepared to assume more risk then you can lower your premiums even further by increasing policy deductibles. Call us to arrange for a policy review with one of insurance professionals.