It’s no secret that business insurance can get pretty pricey. There are a lot of risks out there that need to be covered, and as a business owner, you might be anxious about the price tag of your insurance. While you know that you need to protect your business and you want to get some peace of mind, you might cringe at the thought of what it will cost – a normal reaction, by the way. However, there are a few things you can do to lower the seemingly astronomical cost of your insurance premium, and we’re prepared to share them.
1. Raise your deductible.
Your deductible is the amount you agree to pay before the insurance company will step in to cover the remaining amount on the bill if you have a claim. For example, if you have a $1000 deductible and a $5000 claim, you would pay $1000 before the insurance company would pay the remaining $4000. A higher deductible means that you have a lower premium and vice versa, so by raising your deductible, you can lower your rates.
Now, you have to consider how much you’re actually able to comfortably pay in the event of a claim. You don’t want to raise it so high that it would be problematic to scrape together the money – you don’t want it to be a burden. So, you have to do a bit of a balancing act.
2. Consider getting a package policy to get a lower premium.
A package policy like a BOP (business owner’s policy) combines several coverages into a convenient bundle. Sometimes it’s less expensive to purchase insurance this way rather than as separate coverages, so you might want to find out what a BOP covers and see if your business qualifies for one.
If your business qualifies for a BOP, you need to ask yourself if the policy fits your business. Are there coverages included that you don’t actually need? Will you need to add any extra coverages that aren’t included in the BOP? These are both important things to consider. For reference, a BOP typically includes general liability, business interruption, and property insurance.
3. Go shopping.
Not like at the mall. We mean insurance shopping. If you’re making a big purchase, you compare prices and look at several stores to make sure you’re getting the best price, right? The same rule applies to business insurance. Comparing rates can help you be reassured that you’re getting the best price for your business insurance. You can go through a reputable, trustworthy broker to shop for insurance rates. Try to find an agent who’s familiar with your industry and the risks that you face. They’ll be better able to advise you about limits and coverages that you might need. That might include workers’ compensation insurance or employment practices liability insurance, but you may also need other coverages that are more specific to your industry.
4. Do an annual checkup on your insurance.
Your insurance needs may change from one year to the next. To make sure that your insurance coverages still fit your business, you’ll have to review your policies carefully. This is also a good opportunity to see if there are any coverages that overlap or that you don’t need anymore. While you should never sacrifice coverage for the sake of saving cost, it can’t hurt to review your risks and your insurance needs.
5. Lower your risk and get a lower premium.
By reducing risks, we mean doing a few things. You can take measures to increase security. Creating a business disaster plan is another way to reduce risks, as is improving safety – for clients and employees – at your workplace.
There are many advantages to undertaking a risk-reducing campaign.
First, lowering your risks can help you save because insurance companies quote based on the risks they see – the riskier your business, the higher your quote will be. By actively trying to reduce those risks, you could get a lower premium.
Second, lower risk means a lower chance of having a claim. Having claims makes your premium go up, so you can avoid that unpleasant occurrence by lowering your chances of having a claim in the first place.
Third, improving safety and reducing risks could qualify you for a discount on your insurance. It might seem expensive to install something like a security system, but with the insurance discount you now qualify for it could pay for itself very quickly. Be sure to ask your agent about steps you can take to lower your risk and qualify for discounts. Discounts shouldn’t be the only motivating factor though – remember what we said about lower claims meaning lower premiums? In the long run, improved safety and risk management pays off for everyone. Yes, insurance and risk management might seem expensive, but so are claims and lawsuits.
Business insurance is not cheap, but there are ways that your company can reduce your premium. You can raise your deductible, get a package policy, shop around, review your policies, and reduce risk by increasing safety. If you’re inclined to despair about your insurance rates, take a deep breath. Make a plan to implement some of the above strategies. You’ll feel better knowing that you’ve got the insurance situation under control.
Speaking of business insurance, do you want to implement Tip 3 and shop for your business insurance rates? We can help with that! Out agents would love to help you save money on your insurance. All you have to do to get in touch is fill out our business insurance quote form or give us a call today.