Manufactures have it tough trying to compete for market share with diminishing margins. We have found great pockets of gold in some places that many never look or do not know how to access. Here are three key areas where money can be found for manufacturers of all sizes.
Group Health Insurance
If this coverage is provided to employees it can easily be in the top five spends on your general ledger outside of payroll. To maintain high quality employees it’s important not to dilute the benefits at the risk of saving money. Instead, look to creative solutions that actually lower the cost of the insurance without risk to employees or your company. Many agents fail to show alternatives to manufacturing clients because it would reduce their revenue from the account. One of the reasons is that agents are paid by commission, so the more the client pays in premium the more the agent receives in fees. You can restructure the compensation plan with your agent to meet your needs and can solve the conflict. The next issue is whether the agent even has the tools and knowledge to deliver the alternative plans that reduce cost even after the compensation has been corrected. Our California manufacturers are seeing 25% decreases!
Many manufacturers have very large pieces of equipment and few manufactures know that this large equipment can often be insured as building coverage versus business personal property, which is less expensive. By making this shift it reduces the cost, you do lose theft coverage for the equipment, so there are some caveats to making this work (most one ton equipment though is not stolen), but it is a tried and trued method that only the best insurance experts bring to the table.
Commercial Auto Insurance
Most manufactures have some vehicles that they move product to customers, or pick up supplies and unlike personal auto insurance, this coverage is negotiable. The question is, what should the cost be for commercial auto insurance for a manufacturer? Agents like to tell us it depends on lots of variables, but it’s not that difficult. Most small manufacturers have flat beds, or box trucks, most are insured for $1,000,000 of liability with physical damage coverage (comprehensive and collision) with deductibles of $1,000. As long as your firm is not having accidents yearly that exceed premiums each year, rates can be pretty standard based on your location, such as San Diego, CA. Rates in San Diego should be between $600-$800 per unit. We have rates mapped out for every city. If you are paying more than you think you should find someone to help you get that cost down, it’s a pretty easy fix. Knowing what you should pay is part of how you find it.
Speaking of mapping – we have mapped out cost for every line of coverage on insurance, health insurance, workers compensation, to liability. We know what premium cost almost any type of manufacturer should be paying for all lines of insurance, how else could we be consumer advocates for our clients. We hope these thoughts have been helpful, we can’t give you all of our secret sauce since we save the big stuff for our clients, but hope this moves you in the right direct.