The last decade has seen insurance premiums rise significantly – in fact, since 2008, premiums have jumped about 10 percent per year, according to an article in DailyFinance.com. Apparently there are two major reasons this is happening:
- More weather-related claims. If you thought you’ve been hearing a lot about floods, hurricanes, fires, and tornadoes in recent years, you’re not imagining things. An increase in seriously detrimental weather events has correlated with a rise in weather-related insurance claims, meaning that insurance companies have had to pay out more often than in previous years.
- Lower profits from the stock market. Combine more claims with less money coming in. Because insurance companies invest the money they take in from premiums, they are as dependent on the stock market as other investors. When the market doesn’t deliver, they’re out money they had counted on.
With nowhere else to turn to make up the losses they were experiencing, insurance companies have taken to hiking premiums for individuals and business owners alike.
Here’s how you can minimize the amount your pay to insure your technology business.
Insurance Cost Management for Small Tech Firms
First of all, it’s important to remember that business insurance is only one way technology firms can reduce the overall risk of loss they face. By combining insurance with other risk mitigation strategies, tech firm owners can lower overall insurance costs.
Start by considering the following…
- Raise your deductible. Opting for a higher deductible means you’ll have to pay out more for damages before receiving coverage from your insurance provider, but it also means you’ll pay less in monthly premiums. To boost your odds of surviving a covered event, you might want to raise your deductible and start squirreling away in a savings account the money you no longer pay your insurer.
- Change your coverage types. If you currently have Property Insurance that protects you for the full replacement value of your business assets, you may be able to save on your premiums by switching to coverage that offers payment for your assets’ current replacement value. This will yield smaller payouts in the event of damage, but it might be worthwhile for the monthly savings.
- Upgrade your office. Depending on the kind of work you do, investing in upgrades to your work environment (such as fire detectors) might lower your insurance costs.
- Update your contracts. Establishing a different risk-sharing strategy with your clients could mean that you have to carry less insurance yourself. Review your current contracts to make sure you aren’t covering yourself doubly in any areas.
- Comparison shop. Comparing multiple quotes may take some time, but it has the potential to save you hundreds on your yearly premiums. (Insider tip: TechInsurance’s agents do the comparison shopping for you so you get the benefits of shopping around without wasting any time.)
- Chat with your insurance agent. Depending on the specifics of your business, there may be more ways you can save on tech insurance. Your agent will have an idea of where to look for hidden savings.
Writtten by Brenna Lemieux - check her out at Google+ or Twitter