Tanner Montague came to town from Seattle having never owned his own music venue before. He’s a musician himself, so he has a pretty good sense of good music, but he also wandered into a crowded music scene filled with concert venues large and small.But the owner of Green Room thinks he found a void in the market. It’s lacking, he says, in places serving between 200 and 500 people, a sweet spot he thinks could be a draw for both some national acts not quite big enough yet for arena gigs and local acts looking for a launching pad.“I felt that size would do well in the city to offer more options,” he says. “My goal was to A, bring another option for national acts but then, B, have a great spot for local bands to start.”Right or wrong, something seems to be working, he says. He’s got a full calendar of concerts booked out several months. How did he, as a newcomer to the market in an industry filled with competition, get the attention of the local concertgoer?
No business owner likes to pay for business insurance, but even more so, no business owner wants to be caught without it.
This year, whether you are building a new business or growing an existing one, you probably have had quite a shock when renewing your business insurance coverage.
Questions like “Why did my rates double?” have been heard in management offices across America, and rate increases of 25 percent or more are not uncommon. How can you better manage your insurance needs? Try these tips:
Evaluate your coverage. Many insurance agents try to do everything. They sell homeowners, auto, life insurance and on top of that they also try to sell business insurance. Business insurance is complex, requires much product knowledge and account management. Be certain your agent is proficient in the area of business insurance and is able to help you identify all of your risks and whether or not you need to be insuring those risks.
Are you getting a good value? Your premium is determined by many factors including: number of years you have been in business, your “loss history” (number of claims filed), your credit history, number of employees, type of business, gross receipts and more.
If you are a new business (less than one year in operation) you are likely to pay more until you establish a history of successful business and minimal claims filed. Be certain your insurance agent is aggressive in seeking better rates for you once you have been in business over one year.
First, evaluate your workers compensation coverage. It is true that small organizations pay a higher percentage of their revenue for insurance management costs than larger businesses. The cost of insurance is overwhelming driven by the cost of workers compensation coverage. According to a study by Marsh titled “Casualty Cost of Risk 2003,” which examined the cost of workers compensation, general liability and auto liability, small businesses spend over 60 percent of their insurance dollar on workers compensation.
Most small-business owners do not have time to fully understand workers compensation costs and after careful analysis may find they are overpaying. The following variables should be evaluated annually:
• Job classification codes
• Modification factors
• Claims processing
• Injury prevention and response plans
• Back-to-work program
If you do not have an internal review process for your workers compensation, leverage your insurance agent’s expertise.
Second, analyze your risk tolerance and ability to pay for small claims yourself.
In the past, low deductibles were sought by many business owners. However, in today’s market business owners filing multiple claims with their insurer find themselves in a predicament: their rates go up and their policy is less likely to be renewed.
For these reasons, more business owners are moving toward a higher deductible and paying for smaller claims on their own. They are using their insurance as a safety net and preventing large or catastrophic losses.
Ask yourself how much you think you can afford to pay of your losses and at what point does one individual loss become a financial burden to you. For example, if you can tolerate paying on your own for incidences less than $5,000, then your insurance should reflect a $5,000 deductible and your rates should improve.
New in 2003, the U.S. government implemented mandatory terrorism coverage. Most policy renewals this year will come with a terrorism coverage option. This will cost you extra in most cases. Be sure to carefully evaluate your need for this type of coverage and, if you determine you do not need it, check with your agent to be sure it was not included in your renewal price.
Third, develop a relationship with your insurance agent.
Consumers and business owners value a good deal, often asking “can I get more for less?” Although these questions are important, it is equally as important to buy insurance through people you trust.
