Next to the cost of labor or materials, insurance premiums often represent the single largest business expense for a construction contractor. It only stands to reason then that successful contractors should seek to take advantage of all available means to minimize insurance costs. The good news is that there are many ways to effectively do so. Some methods are fairly simple, for example price shopping when looking for a policy. Others techniques, such as applying for credits and reviewing modifier rates are a bit more involved. In either case, most construction related businesses will find that the effort is well worth the reward in the end. When efficiently managed, even small contractors can realize a significant reduction in premiums. Here's a few tips on how you can save money from an insurance professional that specializes in writing polices for the construction industry.

My first piece of advice is to always shop around for the best price and get several quotes from multiple agents. The difference in price between the lowest quote and the highest quote can be substantial. This is especially true of general liability, commercial auto and commercial property coverage. Shopping around also means shopping for the agent that is the best fit for you. Make sure you are using an agent that has experience writing insurance for the construction industry. As someone who specializes in working with construction clients, I can tell you that I might not be the best person to come to if you were looking at liability coverage for a doctors office or a property policy for a manufacturing plant. Construction insurance represents a specialized area of insurance. Just as lawyers or doctors specialize in a particular area of their trade, so do many insurance agents. Not all agents posses the specific industry knowledge that is required to get you the best rates or have access to carriers that offer the most favorable prices for construction businesses. The additional tips that I will give in the following paragraphs are important methods to controlling your insurance costs. With that in mind, don't be afraid to test your potential agents knowledge of these concepts. Ask what advice he or she can give you on how to lower your rates. Ask for references from other construction clients that they work with and don't be shy about calling those references. Lastly, make sure your agent knows that simply renewing the same policy every year is not sufficient. In many cases renewing the same policy is the best way to go, but not always. It is easy for an agent to get comfortable and stop working hard to earn your business. Don't let that happen. Read more...