Cost-reducing measures for tribal general liability insurance
Keeping costs down is the name of the game in this economy. Whether it’s costs for raw materials, employees – yes, even insurance, we’re all looking for ways to save money. And when it comes to insurance, tribes and their various businesses have a unique set of advantages and challenges.
General liability insurance for tribes
So let’s start with a quick primer: just what is general liability (nicknamed “GL”) and why does your tribal entity need it? General liability insurance protects your company against third-party claims of injury and damage to property. It guards a company’s assets and pays for obligations – medical costs, for example –incurred if someone gets hurt on your property or when there are property damages or injuries caused by you or your employees. Liability insurance also covers the cost of your legal defense and any settlement or award should you be successfully sued. Typically these include compensatory damages, non-monetary losses suffered by the injured party, and punitive damages.
What affects tribal general liability insurance?
- Your Business Premises. The size and condition of your tribal business affect rates, because GL covers premises liability claims. The larger your location, and the more poorly maintained your property, the greater the chance of, for instance, a slip-and-fall injury. Keeping your building up to code and maintaining it well will save you premium dollars.
- Location of your business. The good news is that your business is most likely located on tribal lands, not in an urban area. That keeps your rates lower. However, businesses with high traffic such as casinos may mean higher premiums, because more people walking in your doors means more chances for possible injuries.
- Claims history. Having a recent claim doesn’t automatically mean your GL premium will be higher, but it’s likely. The type and magnitude of the loss are the key factors that are considered.
- Type of Business. This one’s another no-brainer: some businesses are inherently riskier than others. For instance, a construction business is more likely to have claims than community daycare. Typically, the higher your industry’s risk profile, the higher your premium estimates will be.
- Your depth of experience. The length of time your business has been in operation, the experience of your management team and the company’s stability can affect your rates.
- Number of employees. Premiums will typically be higher if you have more employees, because the risk of them accidentally causing damage to a customer increases with the number employed. Your application will typically request a breakdown of full- and part-time employees, as well as the number of subcontractors or consultants you employ so your provider can asses your risks accurately.
- Limits and deductibles. Naturally, the higher your limits, the more your policy will cost. This is never a good reason to scrimp on coverage, though. At the same time, the higher your deductible – the more you’re willing to pay out of pocket – the lower your monthly premium.
How you can keep your tribal general liability rates low
Now that you know what factors are considered when determining your rates, let’s take a closer look at how you can work to keep your rates low.
- Follow through on your risk management plan. At the risk of beating a dead horse, we can’t stress how important it is to create and maintain your risk management plan. When you’ve identified potential risks, defined how you will manage these risks, and then followed through to ensure correct procedures are followed, you’ve gone a long way towards minimizing risks. Your rates will reflect this. From correcting parking lot or sidewalk issues, to how you handle wet flooring, to pinpointing potential security issues, we’ve gathered industry best practices and provided them in earlier blog posts, so scan them to see what ideas you may be missing.
- Continue training on workplace safety. Not only are you protecting your customers and keeping your general liability rates low – you’re also protecting your employees from workplace injury. Specialized new employee training, written procedures proper equipment and regular ongoing training are critical.
- Reconsider your deductibles and limits. Talk over your policy limits with your insurance agent, once you’ve reviewed your business for the year. Have you grown? You may need to consider increasing some limits; and if your profitability has been higher, you may be able to increase your deductible. on the other hand, you may need to reduce your limits if you’ve moved to a smaller or better-maintained building or completed upgrades, or if you’ve laid off a number of employees, thus lowering your risk.
- Pay your entire premium up front. Your GL policy’s premium can typically be paid in monthly or annual installments. Yes, it’s easier on the monthly budget to choose a smaller monthly payment, but consider paying your entire premium upfront. You can usually save a little money this way because many insurers offer discounts for premiums paid in full. Plus, it’s one less bill to juggle month-to-month.
With these tips and an action plan in hand, you can save without sacrificing protection for your tribal business.