Avoid Bad Practices That Might Inflate Your Small Business Insurance Premiums

Entrepreneurs would like to ensure that their small business insurance premiums remain as low as possible. The easiest way to successfully do this is to follow the law and safety guidelines set by the city, county and state, and not neglect maintaining safety standards.

Seven Bad Practices You Can Avoid

• Don’t ignore workplace safety. When workplace cleanliness and compliance with regulations and laws are neglected, chances of workplace injuries are higher. Company history that is peppered with non-compliance and resulting injuries raises the rate of insurance premiums.
• It is best not to have any intermittent gaps in small business insurance coverage. A gap or lapse of policy reflects poorly on company records.
• Underinsuring is a bad practice. When you choose to cut corners while insuring your small business, you open yourself up to underinsuring penalties and higher insurance premiums in the future.
• Self-insuring can land you in a mess when your retention pool is not flexible enough to meet the actual risk faced by your company. Getting affordable insurance coverage after self-insuring may be difficult. While most states specify the amount that a self-insured retention must set aside, keep in mind that actual risks might be substantially higher and better provision needs to be made for it.
• Failing to strictly adhere to federal or state employment laws will eventually result in higher premiums. This includes registration of employees as contractors to save on workers’ compensation payments, hiring illegal workers and discriminating while hiring workers. Additionally, do not work with contractors who indulge in bad practices or are not insured themselves.
• It is important to pay your premiums on time. If you allow your small business insurance policy to lapse due to non-payment, getting insurance coverage will become tricky and more expensive.
• Small business owners have to be conscientious about reporting potential claims. False or inflated claims may result in an increase in insurance rates.

Implement best practices from the outset to keep your insurance premiums from rising.