Three Secrets to Lowering Insurance Premiums

Most insurance agencies offer credits to lower insurance premiums based on a variety of factors, such as driving records, workers’ compensation history and recorded training programs. Three agribusiness insurance experts revealed toFeed & Graintheir top tips for saving money on insurance costs every month.

1. Raise your deductible

One way to control premiums is to take the highest deductible that the insured is comfortable handling because the higher the deductible, the lower the cost.

According to John Quirk, director of marketing forRural Mutual Insurancebased in Madison, WI, “Depending on the type of buildings the insured has they may be able to save some premium by electing to go with an actual cash value settlement rather than a replacement cost settlement. Some companies may also allow the insured to exclude coverage on buildings that they may elect not to rebuild in event of a major loss.

This concept applies to vehicles as well. The insured may even elect not to have physical damage coverage on some or all of their vehicles in order to save premium dollars.

2. Create a safety culture

According to Dick Anderson, property/casualty products and client service manager ofAg States Group, Inver Grove Heights, MN, having a well-documented safety program in place is the best way to reap insurance savings.

“It’s more than ‘do they have proper OSHA manuals and do they document training?’” Anderson says. “You can see it by walking through the facility if things are neat and orderly, fire extinguishers are charged and properly positioned. We check if employees are wearing goggles and gloves when working with anhydrous. We talk with employees about how they do their job, and that’s why it’s so important to maintain a safety culture throughout all levels of the business and reinforce that with employees.”

Anderson adds, “It’s beneficial to dedicate people within the organization to be safety directors or contact people. Investigate accidents — not only what caused them, but what could be done in the future to prevent accidents like that. This all helps build a safety culture, which can lower premiums.”

3. Take preventive maintenance measures

Insuring a feed and grain facility is not like insuring a normal building. An office building, for example, has a very low rate because it’s unlikely an explosion or fire will occur. But in this industry, there are a lot of hazards that have potential to cause disaster. But regularly conducting facility maintenance will help avoid those disasters and can help lower your insurance premiums.

According to Steven Simmons, risk management manager forNationwide Agribusinessof Columbus, OH, installing heat warning devices, spark detectors and flame suppressant systems are all recommended prevention mechanisms, but the most important thing is cleanliness and maintenance.

“Bundle wires together, keep floors and working areas tidy, replace bad bearings and betls,” says Simmons. “Diligent maintenance can lead to lower premiums by reducing accidents that may cause harm to your employees and the facility.”