Your New York business insurance coverage is one of your biggest budget items, and one of the surest ways to reduce your insurance costs is to reduce the cost of your risk. After all, the better you manage your risk, the better risk you are for your business insurance provider.
To reduce the cost of your risk, you need to identify; control; finance or transfer; and monitor risk. As a business owner, that means you must think like a risk manager, whether you have a dedicated risk management team or you are wearing that hat yourself.
The first step is to get organized.
You can’t effectively manage your business insurance risks if you don’t clearly identify those risks to begin with. For that, it’s helpful to organize your risks into the four classifications taught by the Certified Risk Manager program used by risk professionals:
Property: Understand the importance and function of your workspace, and take these measures to protect it:
- Have burglar and fire alarms to provide the quickest emergency response when something goes wrong, which could make the difference between reopening your business next week or next year.
- Take steps to protect your property when bad weather is expected such as a hurricane or big snow storm.
- Have an IT solution in place to protect your data, with offsite backups in case of disk failures and firewall and virus protection for cyber threats.
- Have a disaster plan readily accessible to all management and staff so if disaster strikes, you can react swiftly and confidently.
Human Resources: Your human capital is your greatest asset – and potentially one of your greatest liabilities. Here are some steps you can take to manage this risk:
- Screen job candidates thoroughly, but make sure you’re complying with all state and federal laws. Be sure to document your searches, hires, reviews, and especially preparation for termination.
- Get the most out of your employees by keeping them motivated and invested in your business.
- Have a social media policy in place with clear dos and don’ts.
- Plan ahead for the loss of a partner or owner due to death or disability.
Liability: Take a hard look at your products or services from a trial lawyer’s perspective, and then take these steps to reduce your business liability:
- Understand your professional limitations; collect certificates of insurance from all subcontractors to document that they’re insured, and ask to be added as an Additional Insured.
- Recognize all hazards around your premises, document all accidents thoroughly, and use incident reports for near accidents to recognize trends and take steps to avoid future incidents.
- Over-engineer your products for safety and use only qualified professionals for work under your brand.
Net Income: Be especially vigilant about risks that directly affect your finances, and take these measures to protect yourself:
- Quantify your costs of goods sold, gross and net profits, etc.
- Occasionally audit your bookkeeper to make sure he or she is on track.
- Quantify the costs of having your physical location rendered uninhabitable, and have a commercial leasing agent who knows the market on hand who could get you and your employees back to work quickly in a new space if disaster strikes.
If you want to control your New York business insurance costs, deploy some non-insurance strategies to aggressively control your risk. Organizing your risks will help you clearly identify them and make better informed decisions in managing them. And that’s a crucial step toward protecting your bottom line.
For more information, about New York business insurance risk management, download our free report, “Ten Unexpected Business Exposures that Obliterate Profit in the Blink of An Eye.”
And if you’re in the construction industry, download our case study collection, “How Six Contractors Discovered Risk Management Success with BNC Insurance and Risk Advisors”