Here are our top 10 tips for surviving the credit crunch and reducing the likelihood of insurance premium increases in 2009.
1. Don't compromise on risk management.
Understand your exposure to loss and manage the risk effectively. Do not try to save money by cutting down or allowing your controls to lapse. Insurers will reward companies with robust risk management procedures.
2. Don't fall foul of employment law.
Job cuts increase the possibility of claims from employees. Breaches of employment law (e.g. unfair dismissal and discrimination); and Employers' Liability claims proliferate. We will assess the exposures and work with you to manage them.
3. Monitor financial performance.
Keep us informed of significant fluctuations in budgeted projections.
We will negotiate with insurers to minimise the impact on adjustment premiums at year end.
4. But budget accurately!
Do not be tempted to save money by under projecting turnover, payroll or gross profit figures. Insurers will get you in the end when your deposit premium is adjusted at annual declaration time. Realistic forecasting will ensure we negotiate the best deals.
5. Protect against bad debts.
Some of your customers will want to ease their cash-flow by slowing down the payment process, others will not be able to pay!
Whilst the availability of Trade Credit Insurance has become restricted, talk to our Credit Team, they are helping businesses through the credit crunch with their innovative strategies.
6. Review your terms of Sale and Purchase.
Do your suppliers' demand minimum levels of cover? For example, Product Liability rates are high in certain trade sectors; are the imposed limits for cover realistic? Will your suppliers accept a lower limit?
Do you import goods CIF? If your supplier arranges transit insurance and adds the premium to the invoiced cost of goods, you may consider purchasing ‘ex-works' and arranging the insurance yourself. This may save money.
7. Keep a close eye on the money.
Exposure to internal and external fraud increases in an economic downturn. Insurance is no substitute for tight financial controls, but talk to us about protecting your business.
8. Consider premium finance.
Spread the cost over the duration of the policy – and boost your cash-flow.
9. Share your strategic plans with us.
If you are considering a divestiture or acquisition, tell us. Our mergers and acquisition experts will undertake insurance due diligence, put you in touch with a funding source and carry out supplier credit management. If it is a divestiture, we will assist you with a pre-sale risk management.
10. Review your employee benefits programme.
Cash plans are available and considerably cheaper alternative to Private Medical Insurance. Talk to us, we can help!
Lynn Richards-Cole, Associate Director
0121 698 8091
l.richards-cole@perkins-slade.com
