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Saving Tips for Business Insurance? 29

curious boss asks: "I have a question for the IT manager types out there: does anyone know how much a business can save on their annual insurance premiums by having their information security policies and procedures audited once a year? How much would an audit cost? I know those are vague questions, but if there's a rule of thumb (eg, cost per server, or cost per employee), or even pointers to getting more detailed information, that would be great."
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Saving Tips for Business Insurance?

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  • I don't know, but... (Score:4, Informative)

    by Fished ( 574624 ) <amphigory@gmail . c om> on Monday March 13, 2006 @06:46PM (#14911555)
    I bet your insurance agent does.
    • by Anonymous Coward on Monday March 13, 2006 @06:51PM (#14911591)
      That's a strange answer. Why would you make that wild-ass claim? Ever talked to an insurance agent that had a clue as to how the actuaries created the rate tables? For my actuary test, I've completed more than twenty times the amount of study that the ridiculously easy CPA test requires. To sell insurance you can be even more of a complete uneducated idiot than a CPA. Those idiots have no clue how us actuaries create the rate tables. That's why the morons that sell insurance make $20k or less per year plus commission, while an actuary that's passed all of the tests averages more than $193k per year.

      You really need to talk to someone that knows something about insurance. An insurance agent knows nearly nothing about the business. That's like asking the janitor at Microsoft for help programming. It's a completely idiotic statement.

      • by Fished ( 574624 ) <amphigory@gmail . c om> on Monday March 13, 2006 @07:01PM (#14911671)
        Uh huh. But the answer this guy needs could come straight of the table.
        • From my experience, the simplest route for this guy is to speak with an adjuster at the company providing insurance- not a salesperson or an actuary. No doubt an actuary could give him a very detailed description of it how it all ends up, but he just wants to know what saves a couple bucks. The adjuster will have the ability to run the numbers a variety of ways to see what trims off a few dollars.

          Simple answer: anything you can do to make your business safer (in any way) will save money.

          Some examples:C
      • Is the implication that insurance salesmen make peanuts because their base is 20k/yr. The + commission is a pretty important piece of the sales puzzle, as anyone reasonably competent in math should know.

        Some of the highest paid careers are sales, and almost 80% of CEOs come from Sales.

        Not that they're a particularly noble breed of people, but they do make teh lootz.

      • That's why the morons that sell insurance make $20k or less per year plus commission...

        Spoken like someone who has absolutely no idea of just how much of his first-year premium goes to commissions. And also has absolutely no idea of the power of residuals.

        -h-
      • That was really helpful.

        I wouldn't want to belittle the amount of study put into preparing for your actuarial exam. I also wouldn't want to put down the experience that other insurance professionals my have. It very possible that an insurance agent might be able to find a way for the insured to get lower rates by making contract changes, moving coverage, or some other change.

        Also, how likely is it that an actuary is going to be the one helping an end user with their insurance cost issues? It would be lik
    • If I adopt a Microsoft free zone on my network, does that give a me a discount and SOX compliance?


      Mod me up, I've slammed Microsoft

  • by acvh ( 120205 ) <`geek' `at' `mscigars.com'> on Monday March 13, 2006 @07:07PM (#14911720) Homepage
    pretty soon you won't be able to get insurance at all without the audit.

    as for the guy and his actuary comment - look, I hate insurance salesmen, too. I know too many of them. but for a business person looking for a rate quote they are a necessary evil. you can't have people calling actuaries for information, actuaries can only communicate with other actuaries.
  • Our insurance company has no knowledge of audits like that, whatsoever.
  • by Anonymous Coward on Monday March 13, 2006 @07:37PM (#14911950)
    I hear you can save a ton of money on insurance by switching to GEICO
  • We are required to prove we keep regular off-site backups, take laptops home at night etc along with the requirement to have a monitored alarm on the premises to even get the insurance in the first place.

    I haven't heard of getting discounts for further efforts...

  • Saving Tips for Business Insurance?

    I suppose that's ONE way to do it... Still, I doubt you'll collect enough tips at your receptionist's desk to pay the whole insurance bill. :>

  • The best short answer is: it depends.

    For a smaller business, the audit's cost in time and resources is not likely to be worth it. It's cheaper from the insurance company's perspective to just take all the losses, divide by the number of policies, multiply by their profit margin, and that's the price. For a larger business, where the answer to the question "how secure is this company, really," the correct answer might save enough money in the long run, both for you and the insurance company, to be worth it
    • When last I checked, the main companies in terms of market share for tech liability policies are Hartford on the smaller end, and AIG on the larger end.

      FWIW, I tried Hartford last month and they said they weren't writing for small businesses anymore.

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