Remember that all insurance
premiums are based on the risks involved. The insurance company
evaluates the situation to determine the risks - or potential for
losses - and bases its rates on the results. Therefore, deliberate
steps you take to lower your risks not only can help safeguard your
business but also may make you eligible for lower insurance rates.
Consider these steps:
- Maintain adequate
lighting throughout your business premises.
- Keep electrical wiring,
stairways, carpeting, flooring, elevators, and escalators in good
repair.
- Install a sprinkler
system, smoke and fire alarms, and adequate security devices.
- Keep only a small
amount of cash in the cash register.
- Keep good records
of inventory, accounts receivable, equipment purchases and the
like. Consider keeping a second set of records off-site, such
as with your accountant, insurance agent or at home.
- Make sure your employees
have good driving records.
- Make sure your employees
know how to lift properly and use all necessary safety equipment,
such as goggles, gloves, and respirators.
- Consider using the
services of a risk manager. Such an outside consultant can advise
you of any safety or environmental regulations you may have overlooked
or not been aware of and talk to your employees about safety practices.
- You may also wish
to raise your deductible where appropriate to lower your insurance
premiums. How high to raise the deductible should be governed
by how much you can afford to pay out of pocket. Be careful not
to raise it so high that you cannot cover it should a loss occur.
- Finally, make sure
your agent is familiar with your business and the risks inherent
in it. He or she should be able to advise you on risk management
techniques and their benefits to both you and the insurer.
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Insurance is a heavily
regulated industry. Every state has some sort of department, administration
or agency that regulates and monitors every insurer operating within
the state's borders. In addition to approving rates, your state's
insurance department is involved in all insurance matters on behalf
of private citizens and businesses. It also issues operating licenses
to insurers and agents, based on their ability to meet the state's
requirements for conduct and knowledge about insurance issues.
Your insurance company and agent work closely with your insurance
department to make sure you are getting the best and fairest possible
service within the state's guidelines. If you ever have difficulty
settling a claim, work with your agent to resolve the difficulty.
However, you can also contact your state's insurance department
if you wish to know more about your options and rights as an insurance
consumer.
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Agents are there to help
you. At the most basic level, any agent should be able to answer
all of your questions about insurance, provide you a thorough assessment
of your insurance needs, and offer you a choice of insurance products
to meet those needs. Also, any insurance agency should provide you
with prompt, quality service in the case of a claim.
Just as important is the level of professional confidence and personal
comfort you feel with the agent. Many people stick with the same
insurance agent for decades, even generations. It helps to find
an agent you can get to know and trust.
An important, but sometimes overlooked, factor to keep in mind is
that there are two kinds of insurance agents: those who represent
only one insurance company and those who represent more than one
insurance company.
Agents offering through their agencies only the policies of one
insurance company often are referred to as "captive agents," because
the company they represent does not allow them to offer their customers
competitive alternatives.
By contrast, agents offering through their agencies the policies
of more than one insurance company are called "independent agents,"
because they can shop around for their customers for the best insurance
values among a variety of competing companies.
A nationwide survey in 1994 showed that Americans prefer to work
with independent insurance agents by a 2-to-1 margin over captive
agents. You can be sure you are dealing with an independent agent
when you see this symbol on the agent's signs, letterhead and business
cards.
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