In today’s society the words “I’m going to sue you” are commonplace. Not only are people filling more lawsuits it is also becoming easier to do so. As a result public liability insurance has become very important for commercial and small businesses. Unfortunately premiums for public liability insurance policies could potentially be very large especially many people are visiting your business premises or event location. Some types of businesses like nightclubs and construction companies find it difficult or even impossible to secure public liability insurance as their risks are too great for most insurers.
If you are able to find public liability insurance for your business then there are three highly effective ways of reducing your premiums and ensuring that you do not overpay for your cover:
Increase Your Excess
Public liability insurance is an expensive product, but is often a requirement in certain industries like banking and finance. In these professions, the chances of needing to use a public liability policy are low yet premiums are very high. The reason for the low chances of needing public liability cover is that a number of controls that minimize risk need to be put in place before the business can begin operating. Since the chances of having to claim are minimal it makes sense to increase the excess as much as possible in order to lower the premium. To offset this additional risk, put the entire amount needed to cover the higher excess into an interest bearing trust account. This might sound like you are paying more instead of saving, but keep in mind that this money will still be yours and can be used in future provided that it is not used to pay your excess. Furthermore this money will accumulate interest. Depending on how much you are saving on your premiums by increasing your excess, you could recuperate the entire amount that you have placed in trust within a year or two. This means that after two years of not claiming, you will have saved the entire excess amount and still have low premiums.
Buy Through an Association
Most types of businesses have some sort of industry association that they can join. If not then there is always the local chamber of commerce. These associations have member benefits including reduced insurance premiums from insurance companies. Associations or member groups are able to negotiate lower rates with insurance providers in exchange for exclusive deals with the insurer. Insurance savings could be as high as 30% for public liability insurance policies which can amount to significant savings for a small business.
Reduce Your Exposure
Public liability insurance primarily covers you for incidents involving customers or members of the general public, so the best way of reducing the chances of an incident from occurring is by reducing contact with people. It might sound nonsensical to have a business that avoids people, but the concept is to reduce unnecessary contact and not all contact. Easy ways of doing this is to reduce your office or shop space or to cordon off areas so that they are not accessible to visitors thereby reducing the areas in which incidents can occur. This is vital for events like music concerts. An extreme example is for a business to close its physical shop and to operate as an online business only. By doing this you can reduce premiums as you are reducing the amount of risk that an insurer needs to cover.
Stuart Broad is a marketer who works for a number of South African Public Liability Insurance sites. If you are looking for a budget insurance, he recommends trying to get Liability Insurance at InsuranceHound.