5 Ways to Save on Your Business Insurance Policy
Business insurance is one of those expenses that a company of any size can’t afford to go without. If you get caught in a lawsuit, or an act of God renders your facilities or equipment useless, the last thing you want is to be forced to shut your doors because you can’t cover those expenses.
For just this reason, SMBs often feel like they’re being held hostage by their insurers. Like you just have to pay what they say and there’s nothing to be done about it. Fact is, there’s plenty you can do to lower your rates and maintain those great rates once you’ve secured them.
1. Always pay your premiums on time – and mind your credit score
The past will always come back to haunt you when it comes to unpaid insurance premiums and/or a poor personal or business credit history. Some providers offer forgiveness for a slip up or two, most do not unless you’ve been with them for decades. Both your personal and business payment history matters, so always work to keep both in check by always paying on time, or early when possible.
Additionally, when it comes to driving coverage, both yours and your employee’s driving history matters to, when dealing with auto insurance premiums – always ask for an abstract prior to hiring, and ask insurers to contact you when/if your rates are affected because of changes to an employee’s risk profile.
2. Be smart choosing your deductible
You might think you’re outsmarting your insurance agent by selecting a lower deductible. After all, they’re just trying to get you to pay out more on your claims when and if you need to make them, right?
No. Absolutely not. Choosing the highest reasonable deductible you can may very well lead to your rates being drastically lowered. They may not also – it all depends on your coverage needs and the overall risk insurance providers associate with your business.
Ask your agent to lay out the price differences for the various deductible options they offer, then decide the maximum you can pay when the unexpected occurs, without putting a massive financial strain on the business.
3. Package your business insurance policies
This is a really simple tip that can save SMBs hundreds, potentially thousands in premium payments every year. If you’ve never heard of Business Owner’s Policy insurance (BOP), then it’s time to crawl out from under that big rock you’ve been hiding under since starting your business!
BOPs allow you to combine three (sometimes more) major types of insurance policies under the umbrella of one premium payment every month. Not all business insurance needs will be covered (ie., auto, worker’s comp, heath, disability). However, Business Owner’s Policy insurance packages will typically cover the following:
- Standard or special property insurance for buildings and their contents.
- Business interruption insurance, including rent or leasing expenses for temporary locations (having enough disaster insurance is so important!)
- Liability coverage to protect you against lawsuits filed by employees, customers, and the general public for harm caused by the business.
4. Keep all insurance updated
This means being completely open and honest about new additions to your business such as major equipment and staffing increases, new products you’re releasing, and expansion projects you’re undergoing including any subcontract work might be taking place inside your business.
Agents can work with you to make sure your coverage is always adequate, and that you’re on the right side of both the insurance company and the law itself. Insurance companies don’t like being left in the dark, and your business is likely to be punished via higher premiums and/or denial of claims if you aren’t upfront with them at all times.
5. Make sure all areas of your business are kept safe (ie., employee education, up to code, meticulously maintained, etc.)
All it takes is for a ceiling tile to fall on someone and injure them to spark an all-out insurance nightmare take hold of your business. Remember, insurance is there to protect businesses in the event of the unexpected.
Keep your electrical, plumbing, and structural all up to snuff in each building you occupy. Also maintain vehicles meticulously. Last, make sure you and your team are constantly reviewing product manufacturing and/or service methods to ensure all safety concerns are addressed before something bad happens requiring a claim to be filled.
Claims mean ponying up the money for deductibles. They also drive up your rates in the long run, potentially leading to the cancellation of your policies if too many claims are filed in too short a time.
Not all 5 of these insurance-coverage-slashing tips will apply to your respective business. However, if you work with your agent, and take careful steps to improve your overall insurance rating, savings will eventually come.
The best advice I can leave you with is to make sure you shop around, both when you’re first seeking coverage, and every time your policies come up for renewal.
Ask around and look for specific insurers who specialize in all the different types of coverage your business needs. This way, you’re working with an insurance company that’s most comfortable with the risks your business is faced with each and every day.
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