Are You Over-Insured?

The one thing you can always count on is change. Over time, every business makes adjustments and changes. Equipment is purchased, land is leased, bought or sold, and employees come and go, buildings removed or built, customers and operations change. One thing is constant in business: keeping overhead low and profits high. This is why it’s important to review your business insurance needs from time to time so you don’t end up paying for more insurance coverage than you need.

Here’s what I mean:

Stop paying for unnecessary coverage
Recently a large farming operation in Southern California asked us to provide a quote on a warehouse it owned. The business, Orange County Produce, had made operational changes a few years back and was now renting its former packing building to another company. That building was still being insured with a full business owner’s policy, which was unnecessary. Leasing a building only requires property and premises liability coverage. Orange County Produce was paying for coverage it did not need. Western Growers Insurance Services was able to secure reduced coverage which lowered premium costs to about a third of what it was previously paying.

“Western Growers came back with a solution,” said Blanca Lozoya of Orange County Produce. “We were able to have a different policy and we are saving money.” 

Operations change, locations change, vehicles change and revenues change. Each of these situations can have a significant impact on both property and liability insurance costs for a business.

Eliminate excess premium charges
In another case, a large fruit grower-packer-shipper asked Western Growers Insurance Services to review its business insurance.  We noticed that several buildings were insured for under $10,000. The deductible on the existing policy was also $10,000 so any claims which might be filed on those buildings would be denied because the building values were less than the policy deductible. Increasing the deductible, we eliminated coverage for the buildings under $10,000 thus also removing the premium charges for a savings of several thousand dollars!

Expand coverage without adding costs
WGIS made another discovery for Skyview Cooling, a large operation in Yuma, Ariz. Skyview had an excess liability policy that covered the same exposures as a basic liability policy, except for certain losses not covered by the basic liability policy. We recommended and secured a full umbrella policy for the same price as Skyview’s excess liability policy. A full umbrella policy is much broader than an excess policy, providing coverage for those business exposures as well as any other liability losses that might occur to the account except for those specifically excluded.  Working closely with the insurance carrier and Western Growers Insurance Services, Skyview was able to expand its coverage without any increase in cost. 

What recent changes has your business made?
It’s important to your bottom line to inform your insurance agent about any significant changes to your business because premiums are affected by change. For example, if a company discontinues hazardous operations, the liability premium can decrease. If the number of employees goes up or down, or a farm labor contractor or a staffing organization is used, that will impact liability and workers’ compensation insurance costs. Even Employment Practices Liability Insurance will be affected by a change in the number of employees.

The right amount of the right coverage
Operations for most organizations rarely stay the same.  Revenue streams come and go; buildings are bought and sold; drivers and vehicles change on almost a daily basis.  In order to make sure your company is properly insured and not paying too much for its insurance coverage, work closely with your insurance agency to make sure you have the right amount of the right insurance. There is no sense or reason to pay for something you don’t need.

If you are interested in reviewing your insurance program to ensure you have the appropriate coverage, please contact us.