Five Ways to Lower Business Insurance Premiums.

Gregory Downs, a New Jersey-based regional vice president with the NI Group, offers these tips:

1. Use the right classification codes. Workers' compensation, property, general liability and automobile policies have classification codes that are used to calculate the final premium. Review these to determine if you can use less expensive codes. If business operations have changed over the years, this exercise often lowers premiums.

2. Do your own pre-audit. For workers compensation and general liability policies, the insurance company audits payroll and sales figures to determine the final premium for the year. Before the auditor arrives, assign the figures to the correct classification codes to avoid misclassifications and overpayments. On workers' comp audits, remove overtime pay and cap executive officers' salaries.

3. Review the status of claims. Even if you don't have many claims, review previous losses annually. Over-reserving of open claims is a leading cause of higher premiums, especially on workers' compensation insurance. Check the workers' comp experience modification factor. If the WC mod was miscalculated, it can be adjusted retroactively, generating return premiums.

4. Strengthen your safety program. Reducing the frequency and severity of claims lowers premiums. Activities like driver training, safe lifting education, product liability evaluations, fire prevention, disaster recovery planning, etc., will help to keep premiums low. Your agent and carrier have resources to help in this area.

5. Get competitive quotes. Every two to four years, get competitive quotes from several insurance companies. You can use your agent exclusively or ask other brokers to submit proposals. It never hurts to have a fresh pair of eyes look at your business operations.