Five Practices Driving Up Your Business Insurance Premiums


Most business owners are looking for ways to decrease business expenses including the cost of their commercial insurance premiums. But there are many companies out there that actually increase their business insurance premiums due to the way they run their business.

Two main factors that determine insurance rates are a company?s industry risk and claims history. Because a company?s industry is fixed, the ability to avoid certain risks common to that industry is beyond a company?s control. But, claims history can be controlled to a point. By failing to follow the five practices listed below, business owners can actually increase their insurance premiums rather than reducing them.

Employee Training

Training employees is essential to helping companies reduce claims, litigation and potential increases in insurance premiums. Proper training on safety methods, customer service policies and employee procedures will keep operations running smoothly and limit liability issues.

Workplace Safety


Keeping a safe working environment is important to worker safety as well as full compliance with federal and state laws. Without workplace safety, injuries happen and claims are filed. When companies do not comply with laws or experience a history of multiple claims, insurance rates can increase.


Along with employee training and workplace safety, documentation is of the utmost importance. Everything a business owner does with regard to employees, maintenance and customers should be documented. Having written proof of training can help to decrease premiums, and documentation can also sometimes result in insurance company rate discounts.

Inappropriate Insurance Coverage

When business owners try to cut costs by reducing insurance coverage or not having insurance at all, they risk penalties by the state as well as higher premiums for being underinsured. Having gaps in coverage can be almost as harmful to companies as having no insurance at all. Allowing policies to cancel due to nonpayment or other reasons can also cause higher rates when a company decides to apply for a new policy. By trying to avoid insurance expense, companies often find themselves with higher cost due to large claims that their insurance limits did not cover as well.

Insurance Broker

Insurance professionals are there to assist with evaluating policies and determining the appropriate amount of coverage necessary to fully protect businesses. By always shopping for new insurance and continually switching between policies, business owners can experience rate increases. Establishing a long term relationship with a broker and insurance company provides stability and a good history that sometimes results in future discounts.

By practicing safety and establishing training for employees that comply with local and state laws, companies can better manage their insurance costs and use the savings to grow their business.

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