Contractor insurance is a necessary expense whether you are a one-man independent contractor, or the owner of your own construction company. What isn’t necessary, however, is overpaying for your coverage. If you are a construction pro, you can lower the costs of your contractor insurance policies for a business of any size, and put more cash back into your pocket with these money-saving tips.
1. Combine Policies
You need a general liability policy to do business, and there is a good chance that your coverage needs won’t stop there. Many brokers and insurance carriers will offer a premium discount if you purchase and combine more than one policy. At Citizens General, we offer an instant 10% discount on both policies when you combine your general liability with commercial auto or inland marine.
2. Increase Deductibles
It’s an easy way to save on your monthly premiums; when insurance deductibles go up, insurance premiums go down. Increasing your deductibles can give you more available cash as your monthly premiums go down, which you can reinvest in your business or even save to go towards the higher deductible in a worst-case scenario.
3. Implement Risk Management
You don’t have to have a specialized degree in risk management to start implementing procedures that will protect your business, investments, and employees. Risk management is the practice of identifying potential hazards and losses to your business, and then outlining ways to avoid them.
4. Save on Commercial Auto Insurance
Your employees are one of the biggest factors in the price of your commercial auto policy. Only hire drivers with excellent records, and check the driving records of any current employees who drive for you at least twice a year. Their driving records can either mean higher or lower rates for your insurance, so don’t get blindsided by an employee with a questionable history behind the wheel. Think twice about purchasing the top-of-the-line model for your next fleet vehicle, as well. The higher the value of an automobile, the higher its premium will be.
5. Save on Workers’ Compensation Insurance
Workers’ comp rates are class rated, meaning all plumbers have the same rates, as do all truck drivers, and so on. However, you can stand apart from the pack and get a lower rate than your competition with the help of an Experience Modifier Worksheet. Experience ratings can lower the cost of your workers’ comp coverage when your claim profile is lower than the industry average. The Experience Modifier Worksheet calculates experience factors using claims and payroll data from the previous three years to determine if you can have lower premiums than the average business in your class. Check your calculations; incomplete or incorrect payroll data could be costing you in higher premium rates.
6. Save on Inland Marine Insurance
Your tool policies may depend on the size of your construction business, and can range anywhere from “bring your own” to fully supplying each of your employees. Many construction pros expect their workers to supply their own hand tools, and provide the power tools needed to get a job done. To prevent theft or accidental loss of any tools, be sure to properly assign and track tools. Keep a record of who has what, the condition the tools are in, and where they are being transported to each day.
7. Save on General Liability Insurance
If you want to keep your General liability premiums down—don’t get sued. A lawsuit and subsequent claim can occur when a third-party is injured as a result of your business. As a contractor, safety is key here. Follow OSHA safety requirements, keep a clean and organized project site, and don’t rush the work. Construction defect claims aren’t covered by general liability, but if one of your workers doesn’t do a good job, a lawsuit could be coming your way (Luckily, you can protect yourself from construction defect claims with Faulty Workmanship coverage). Avoiding general liability claims is the easiest way to get the benefit of low rates on the most basic, and necessary, of contractor insurance policies.
8. Save on Builders Risk Insurance
Builders risk policies are terminated when a policy is complete. But not all policies are one-size-fits-all.
A Master builders risk policy is different than a project-specific policy, it includes additional features which allow for more flexibility to insure multiple projects at the same time. These policies often have broader coverage and allow for quarterly premium adjustments, and customized coverage and deductibles.
Wrap-up builders risk policies are intended for larger construction projects, and the cost of these policies can be divided among general contractors and sub-contractors, spreading the cost out for all. Talk to your contractor insurance broker to see if a master or wrap-up policy would work for your projects.
Some cost saving measures will work on all of your contractor insurance policies, such as better risk management measures, combining policies, and increasing your deductibles. Other policies can be impacted by individual actions you take. You have power over your premiums, and the ability to make the moves to put more cash back into your construction business without sacrificing coverage.