With business costs increasing dramatically in the UK, finding ways to reduce expenses is crucial. One of the areas in which you could reduce expenses is your insurance, and this can be done in many ways. The number one way to reduce your premiums is to reduce your risk. In summary, when risk is lower, the possibility of claims is also lower, so insurers are more likely to offer lower premiums.
However, what many managers experience when succeeding in this goal is that the resulting reduced risk also lowers costs comprehensively across their business. Read on to see ten ways to minimise insurance risk and how this will save your business money in the long term.
Conducting detailed risk assessments results in identifying potential hazards or other areas of concern. In the workplace, this data (and the actions you'll take when informed by it) has many benefits for your business, but it also reduces your insurance premiums.
As businesses grow and evolve, either in scale or with new processes and equipment, your current assessments may need updating to be effective with your new status. This is why we highly recommend auditing your risk assessment plan periodically to guarantee that its questions fit the new context of your business.
When planning to review your risk assessment plans, you should bear in mind the following factors:
Insurance providers take a business's approach to health and safety requirements very seriously, as it is one of the major factors in deciding premiums. This is because of the understandable correlation between ineffective health and safety leading to incidents and successful claims.
When companies demonstrate their commitment to reliable health and safety procedures, they generate confidence in their employer's liability insurance providers and encourage them to offer lower premiums. The solution here is similar to the previous point: maintain the highest knowledge of health and safety guidance with HSE. The resources provided will assist significantly in adapting a changing business to include sufficient health and safety plans that will reduce claims.
Once you're informed of the latest guidance, you should implement it comprehensively to your team for the fastest and most secure update. These will cover varied areas of a business, from new manufacturing processes that improve quality control and limit claims against your product liability insurance to new resident care procedures that support your existing residential care home insurance.
This advice is deeply connected with remaining informed, and neither will provide improved results alone. Lack of effective communication between these steps will cause confusion, so we recommend that a specific health and safety officer is assigned to your team, who will be a central point for all questions about new processes. You can further improve your workplace safety by choosing someone who has the skills to be the team's first aider as well. Documenting these actions increases the trust of your insurance provider and will lower your premiums.
Incidents are, unfortunately, a part of the working world, so incident management is crucial for a proactive attitude to these events. This process, when combined with risk management, is the source of the data, and together, they enable managers to create adaptable action plans that result in reduced events and potential claims. We recommend investing in in-depth incident management as it not only safeguards businesses against immediate financial losses from incidents and claims but also fosters stronger partnerships with insurers.
Separate from your staff, your asset condition and care also need to be addressed to reduce your business's risk profile. Equipment not cared for will become inefficient and have erratic breakdowns, and their unpredictable operation will increase the chance they will be the centre of the incident with a claim attached. This is especially appropriate for vehicle-based businesses such as commercial fleets.
Regular inspections of vehicles detect and rectify issues such as worn-out brakes or faulty steering mechanisms; this reduces the likelihood of accidents on the road. Insurers view businesses with effective maintenance protocols as lower risks, as evidenced by their proactive efforts to maintain safe working environments. These businesses are more likely to secure favourable fleet insurance terms and reduced premiums.
Embracing sustainability practices and prioritising environmental protection isn't just about corporate responsibility; it's also a strategic move that will positively improve your costs, such as reducing your premiums.
For instance, implementing recycling and reuse strategies and reducing carbon emissions lowers the risk of environmental incidents, such as pollution or resource depletion, which could result in costly liability claims. Additionally, claims related to pollution and environmental contamination are reduced when instituting secure containment procedures for any harsh chemicals being transported or stored onsite.
Insurers recognise the reduced risk exposure of environmentally conscious companies and may offer lower premiums on their insurance for manufacturers as a reflection of their lower likelihood of filing claims related to environmental liabilities or supply chain interruptions.
Securing your assets and reducing the potential of thefts at your business eliminates the financial costs related to replacing stolen items and also proves your business as secure for your chosen insurance providers. For example, wholesale insurance providers understand this the most, as their clients will have significant risks associated with the potential theft of their stored items. However, there are actions that will mitigate these risks enough for providers to feel comfortable lowering their premiums. Actions such as updated CCTV, multispectral cameras, secure access ways with authorisation locks, and anti-climb fences are all great investments that significantly improve your facility's security.
Strengthening and updating cybersecurity measures for your business's online presence is the best course of action to protect against digital threats and is also a proactive demonstration of your commitment to effective risk management to your insurers.
With increasing numbers of commercial businesses using eCommerce, asset care is now a digital concept as much as a physical one. You need to be able to protect your customers' private payment details; otherwise, they will be at risk, and so will your reputation amongst your customers, business partners and your insurance provider.
Cybercrime is changing all the time, and existing solutions will be inadequate sooner than you think. You should regularly update and fortify your digital infrastructure with advanced cybersecurity protocols, such as encryption, firewalls, and multi-factor authentication, with data sourced from regular vulnerability assessments. As a result, these actions may make you eligible for lower insurance premiums, reflecting your reduced exposure to cyber-related risks and the associated cyber liability claims.
In terms of financially protecting the future of the business, we recommend creating an emergency business continuity plan (BCP) as a proactive strategy that will significantly impact insurance premiums for UK businesses.
A BCP outlines procedures to ensure essential functions can continue during and after a disaster or disruption, be it a natural calamity, cyberattack, or supply chain interruption. Insurance providers view businesses with comprehensive BCPs as lower risks, as they demonstrate preparedness to mitigate the financial impact of unforeseen events. By having a BCP in place, businesses can potentially lower their cyber attack insurance premiums and protect their business.
At IC Insurance, we always put the customer first, and that includes offering advice on the actions needed to be completed to lower your premiums.
We understand that finding the right insurance coverage can be daunting, so our insurance brokers in Bolton help our clients quantify and manage risks in the most effective ways. Our team of experts will source the most effective packages for you to find the best policy to protect your business at a competitive premium.
