Tip #1 If you are starting out in business or have grown dramatically and it doesn’t matter where your office is located, try to set up your business away from metropolitan areas because insurance underwriters rate your insurance policy by the territory your primary location is based in. For example having an office in Riverside County could cost you 30 to 40% less if you set up shop in the City of Los Angeles. Always ask your agent about these things for greater details.

Tip #2 If you get great customer service and have an excellent relationship with your agent, it should be no problem for you to ask him to shop for insurance when your current policies expire. Many new insurance programs have come on the scene this past year and some are extremely competitive so make it a point to compare prices. If you current agent won’t take the time to save you a buck, find one that will. These are tough times for all businesses right now and saving money on insurance is not just frugal, it’s the difference between making and not making a profit. Your agent should be as important as your tax man, attorney and priest!

Tip #3 Insurance costs can also be reduced by increasing that size of your deductible. Yes, if you increase your deductible from $1,000.00 to $5,000.00 you will exposure yourself to greater expense in the event of a claim, but, over the long haul, the risk may be out weighed by the benefits of the reduction in premium costs.

Tip #4 One of the best things you can do to control insurance costs is to control claims. This starts by being as selective as possible with the people you hire to work for you. Check their background, look at their credit, call there references, have them show you their skills. You can also create a safety program and take the time to give your employees periodic training. If you have a workers comp policy, get yourself a group medical plan, this will cut down on your premium by giving you credits to apply. Nothing is more expensive that buying insurance after you’ve had expensive claims. In fact, when your claims cost over the previous 3 years exceeds 40 or 50% of the premium you paid during that period, you may not even be insurable. If you still are, you can bet you won’t get coverage from the best carrier at the best price.

Tip #5 Don’t let your coverage lapse. Underwriters will charge you more money, 15 to 50% more money.

Tip #6 Always purchase commercial auto coverage if you use your vehicle for business. It’s a little more expensive. So you may ask how does this save money? Well if you get in an accident on the job, injure someone and they hire an attorney that knows what he’s doing, he’ll discover that you were on the job and your personal insurance policy will not pay your claim because it will have a specific exclusion that will not pay claims that occur while your vehicle is being used for business purposes. Another exceptional endorsement for a commercial policy is that it offers hired and non owned coverage. This will cover you and your business in the event that one of your employees or even an uninsured sub causes an auto accident while in the course and scope of your construction operations. Don’t leave home without commercial auto coverage.

Tip #7 The cost of insurance for contractors doing residential operations is far more expensive that the cost of insurance for commercial operations, and, commercial building is booming, whereas, residential building is in the tank for now.

Tip #8 Calculate the yearly cost of your insurance in advance and be sure to write it into you job costs. Someone has to pay for these things and we’ll in business to make money. Don’t try to sell your clients on price alone. Sell them on how well you keep your deadline, the quality of your work, show them that you are honest and hard working and someone that will always communicate and keep them informed. People are willing to pay a much higher price for this kind of quality and service. Make sure your insurance costs are considered when you take a job.