Almost all businesses – whether big or small – must have commercial liability insurance. It is necessary to protect you in case something you produce or a service you offer, causes harm or loss to anyone. It also ensures that anyone filing a suit against you can get compensated. But while it is crucial to have this kind of insurance coverage, there is no reason it should cost too much. With some planning and scrutiny of your business, you can do something to reduce the risk for a commercial insurance company taking you in – and thereby reduce the premium you have to pay.
The key is to identify which parts of you business might somehow constitute a risk. It could be something as simple as the stairs to your office building gettin very slippery after rainfall, which could get you in trouble if a client slips and breaks his leg. If you did something about those stairs, you would have done somthing real to reduce the risk for the insurance company, and that would pay off. So your property must be safe. Your indoor climate should not make your workers sick. Then there are your products. Are they properly designed to be absolutely safe? Have you had to recall batches of products in the past because they were not safe to use? Do you have a plan for how to prevent that happening again? Be sure you show it to the insurance agent. Let it be known that you are taking action – and be sure to document this. What about quality control? Do you produce good products, or do they tend to break within the warranty period? That will cost you, but I probably don’t have to tell you that. And what about your environmental footprint? Is your plant full of dangerous chemicals – and are you doing enough to prevent them from spilling into the environment? Make sure there is no reason to fear your operation.
All in all, if you do your homework really well, you can bring that insurance premium down by a lot before the first payment, so take the time to do this!
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