Need to Limit Insurance Premiums?
Here are six smart things to do to lower your insurance premiums…
1 Look Before You Leap
No-one wants to pay over the odds for their insurance, but avoid jumping for the first cheap PII offer available.
Before you think about reducing the cost, firstly make sure you are happy with the product you are purchasing and fully explore the cover being provided. Always try and achieve a civil liability wording and look at the additional covers and exclusions that are available.
2 Do Your Home Work
All insurers are not the same and your research should take in the solvency and strength of the provider, their financial rating or any additional backing they have. As with any professional service, when you’re choosing between two or three prices, you will not be comparing the exact same product. Unlike a book, you can judge PII by its cover.
3 If it ain’t Broke…
The PII market is a brokered market; therefore always consider the support and advice you are getting from your broker.
Always be aware of the service the broker is offering and what insurers they have access to. Some brokers will place policies with a number of insurers whilst others will hold exclusive schemes.
4 A Question of Balance
Bearing in mind that the two variables of any renewal are the limit and excess, there are two crucial details to consider in the small print.
A lower limit and higher excess will reduce the premium but consider the capital requirements that an excess commitment makes on the firm and if the limit is appropriate to cover you.
Don’t forget that if the limit is on an aggregate basis the lower you set your PII limit the higher the exposure to the firm and its directors.
5 Play the Long Ball
The best way to reduce your PII premium without having to make any sudden upheavals is through subtle, long-term adjustments to the way you run your business. These could include improving risk management and putting in place more solid checks and balances that insurers will appreciate.
As a claim can sometimes be inevitable an insurer will want to understand what changes the firm has made since the claim, how was it dealt with and how proactive they were in making sure the situation does not reoccur.
Your checklist might include:
And on buying premiums next year:
No-one wants to pay over the odds for their insurance, but avoid jumping for the first cheap PII offer available.
Before you think about reducing the cost, firstly make sure you are happy with the product you are purchasing and fully explore the cover being provided. Always try and achieve a civil liability wording and look at the additional covers and exclusions that are available.
2 Do Your Home Work
All insurers are not the same and your research should take in the solvency and strength of the provider, their financial rating or any additional backing they have. As with any professional service, when you’re choosing between two or three prices, you will not be comparing the exact same product. Unlike a book, you can judge PII by its cover.
3 If it ain’t Broke…
The PII market is a brokered market; therefore always consider the support and advice you are getting from your broker.
Always be aware of the service the broker is offering and what insurers they have access to. Some brokers will place policies with a number of insurers whilst others will hold exclusive schemes.
4 A Question of Balance
Bearing in mind that the two variables of any renewal are the limit and excess, there are two crucial details to consider in the small print.
A lower limit and higher excess will reduce the premium but consider the capital requirements that an excess commitment makes on the firm and if the limit is appropriate to cover you.
Don’t forget that if the limit is on an aggregate basis the lower you set your PII limit the higher the exposure to the firm and its directors.
5 Play the Long Ball
The best way to reduce your PII premium without having to make any sudden upheavals is through subtle, long-term adjustments to the way you run your business. These could include improving risk management and putting in place more solid checks and balances that insurers will appreciate.
As a claim can sometimes be inevitable an insurer will want to understand what changes the firm has made since the claim, how was it dealt with and how proactive they were in making sure the situation does not reoccur.
Your checklist might include:
- Are we on-track with our Business Plan and does it get actually used and reviewed?
- Do we have a proper Practice Manual covering key procedures, etc.?
- Are our case management and our client relationship management systems robust?
- What training has our staff had – beyond the minimum CPD requirement?
- Do we have a workplace safety plan?
And on buying premiums next year:
- Become active in trade associations – could we join a buying group?
- Work with an independent insurance agent – have we access to other insurers?
- Are we paying for irrelevant or duplicate coverage?
- Have we been forthcoming with information on what we are actively doing?
- Have we worked on risk management initiatives?
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6 The Bottom Line
Standard documents such as engagement letters, terms of business, fact finds and reports are a significant tool in risk management as they should set out very clearly what the considerations are. Without these documents, or if the documents are poor, insurers will view this as a problem as they will consider if a claim arises, how easy will it be to defend successfully? Be realistic in your expectations. An adverse claims history or a diverse/complex company structure will tend to require a higher average rate against the rest of the market. Your broker should manage your expectations through the renewal process to help you understand where you sit in the spectrum. |
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