Cutting Costs: How Effective Risk Management Can Lower Your Insurance Premiums

After a season of rising insurance premiums and inflating costs, business owners are looking for ways to minimize expenses and reduce insurance costs. Implementing risk management procedures in the workplace may be the key to boosting your bottom line. 

Risk management involves identifying potential threats to your business or employees and creating a plan to prevent and minimize losses. When your insurance premium is determined, an underwriter will examine all risks associated with the industry and your business, some industries are more dangerous than others, and will see that reflected in their premium. However, a proactive risk management strategy will appear favorable to underwriters and encourage a lower premium. An insurance premium is not entirely dependent on how risky your industry is, but how safely your business manages those risks. 

With a proper risk management policy, underwriters know that the business takes safety seriously. Risk management will show an overall reduced likelihood to file a claim or minimize those that do occur. Because of this, insurance companies show more trust to these companies.

There are several options for implementing risk management practices into your business:

1. Regular Evaluation of Risk
   Assessment of potential risks in the business, from physical safety to procedural issues can help identify potential hazards. As these risks are found, preventative measures can be implemented to stay ahead of potential issues.
2. Safety Procedures
   An insurance company will want to see that you have properly documented and enforced safety procedures. Taking the extra initiative to keep employees safe will show underwriters that the business is serious about safety. Safety procedures should be updated to reflect changes in procedures and new risks. 
3. Employee Training and Safety Meetings
   Employees must be trained in proper procedures and attend regular safety meetings for refreshers on safety in the workplace. Well-trained employees are less likely to make mistakes that could lead to claims.
4. Proper Documentation
   Detailed records of all safety procedures and training can be presented to underwriters during the renewal process. These documents can also provide valuable insight to areas of improvement in your risk management practices.
5. Engage in Safety Culture
   A company that values safety as a top priority will see that value in all their work and employees. A proper risk management plan must include everyone, from the top down. When leadership in a company takes safety procedures seriously, the rest are more likely to follow.

As you implement these strategies into your workplace, communicate them with the underwriters working on your policy. Especially in a risky industry, it is crucial to go above and beyond to show you are taking every precaution to avoid risks. This can be a huge step in the right direction to reduce insurance premiums and raise your profits.