5 Ways SMBs Can Manage Surging Insurance Costs

1. Reevaluate Your Insurance Providers

Switching insurance providers can significantly reduce costs. SMBs like Jay-Hill Repairs, facing a 20% increase in premiums, found relief by changing their health insurance carrier. Regularly reviewing and comparing insurance plans can help you find more affordable options tailored to your business needs.

Consider working with a consultant who can negotiate better rates on your behalf. The savings could be substantial, especially if you’re dealing with multiple types of insurance.

2. Implement Stringent Hiring Practices

Insurance costs can be influenced by employee behavior, especially in roles that involve driving or operating machinery. By adopting stricter screening processes, such as thoroughly checking driving records, businesses can avoid hiring candidates who might increase their premiums.

Make it a policy to hire candidates with clean records for roles that impact insurance costs. This proactive approach can lead to long-term savings.

3. Enhance Workplace Safety Programs

Investing in workplace safety can reduce the likelihood of accidents and claims, which in turn can lower insurance premiums. Regular safety training and adopting best practices in operations can make your business less risky to insure.

Regularly update safety protocols and ensure all employees are trained. Not only does this help with insurance costs, but it also creates a safer work environment.

4. Explore Group Insurance Options

Group insurance plans, like those offered through local chambers of commerce, can provide more competitive rates for small businesses. These plans pool together multiple businesses to get better deals on health and other insurance types.

Join local business networks or chambers of commerce that offer group insurance plans. The collective bargaining power of these groups can lead to significant cost reductions.

5. Adjust Coverage to Match Current Needs

Reassess your coverage levels to ensure they match your current business needs. For example, if your business has downsized, you might not need as much coverage as you did before. Similarly, raising deductibles or opting for a smaller network of healthcare providers can also reduce premiums.

Work closely with your insurance provider to tailor your coverage. Ensure you’re not paying for more than what’s necessary for your current business situation.

As insurance costs continue to rise, small businesses must take proactive steps to manage their expenses without compromising on the quality of coverage. By reevaluating providers, implementing stringent hiring practices, enhancing safety programs, exploring group insurance options, and adjusting coverage to match current needs, SMBs can better navigate these challenges and maintain financial health.