Program Business Insurance

Most of the times dealing with an insurance carrier or insurance broker the deals and program business insurance usually results in better coverages and better pricing for your small business. Although, if your industry is quite large it sometimes can have the opposite effect as if there are many members of the program the claims tend to increase and the premiums tend to be average premiums for all within the group.

That means that sometimes even though you were not in a special program the program is generating the base rates and premiums on the bell curve and you might not be getting the best price for your individual small business. That is because the premiums are averaged throughout the group.

Business insurance that is purchased thru a special program or group works best for the small business owner who has fewer options. It also works well if your organization has had problems with claims and losses over the past few years. The larger companies are in essence subsidizing your program insurance rates and premiums in the group-purchasing plan to allow you to pay a much lower rate than you otherwise would get.

If you are a larger firm or if you have had a great claims and loss ratios, many times you will get better pricing on your own versus being in the group plan. As we stated earlier the program business insurance plans tend to be “averaged” premiums and rates. If your company is above average, you are only going to get the average premium or rate. The risk management tip of the day is do not assume that a program or purchasing group is always cheaper as it depends upon whether or not your company is above or below average in the group.

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