How to Save Money on Business Insurance

As a business owner, you are constantly looking for ways to streamline your operations and be cost-effective when it comes to managing costs. However, are you maximizing potential savings on your business insurance?

Determining how much you should be paying depends on several factors, including how the insurer calculated your premiums and your business details. Find out if you’re overpaying or not with this helpful guide to save your bottom line from insurance overhead.

Factors that Impact Business Insurance Cost

Before you dive into our list of money-saving tips for your liability coverage, let’s explore the three influential factors that drive a price up or down:

Policy Needs

When choosing insurance, the policy options and limits you need will vary depending on your business activities. The first consideration should be what coverages you are or are not required to have, whether legally or contractually.

You should also research if there are any specialized insurances based on the goods or services you provide. For example, if you’re an accountant, you may want to buy a professional liability policy to cover any errors you make that result in a client might sue for damages. This scenario isn’t usually covered by general liability since it covers claims stemming from your services.

Your Business is Location

You probably already know that the state your business operates in can impact what rate you get quoted. However, if you’re in a neighborhood that often has commercial claims regarding break-ins or vandalism, your monthly premiums could be higher than in a different part of town.

Government agencies like workers’ compensation and your carrier’s discretion can also play a role in calculating the cost of your policy.

Potential of Your Filing a Claim

This factor boils down to the risks you face and the likelihood of them occurring. This could involve employees getting hurt because of the equipment required to perform their jobs or a data breach where intellectual property could get stolen.

Whether you need commercial auto insurance for your fleet or professional liability coverage for your hair salon, you need to know your risks to understand the costs.

3 Ways to Save on Business Insurance

The insurer you choose to provide you with commercial coverages should be able to assist you in determining what you need for the best price. However, it never hurts to do your homework first so you know all the ways you can save. The following three tips can help you achieve some savings without sacrificing peace of mind:

1. Know Before You Buy

One of the reasons businesses spend too much on insurance is because they have more coverage than they’ll ever need. To ensure your business policy is sufficient and not over the top, do the following:

• Be reasonable in the amount of coverage you buy. While you can opt for higher policy limits, do so if there is a real risk of needing it.

• Thoroughly review the fine print, including what is or is not covered and all the limitations and terms.

• Don’t hesitate to call around for quotes and get an apples-to-apples comparison of your current policy to those offered by other insurers.

• Consolidate some of your coverage into a bundled Business Owner’s Policy (BOP). Buying multiple insurances typically garners a reduced rate.

• Don’t choose a carrier for just the fair price tag. Research customer claim experiences, any solvency issues, and their general reputation. Paying slightly more is worth it if the insurer provides outstanding service.

• Always accurately classify your employees when purchasing workers’ comp coverage. This can save you money or, at the very least, ensure you won’t have to fight to get a claim approved.

2. Get the Most from Your Existing Coverage

If you’re already locked in for the insurance term, no worries! This list of tips is designed for those looking to optimize their business insurance policies.

• Consider changing your policy terms to a slightly higher deductible to reduce your monthly premium. Just make sure whichever amount you choose you can afford.

• Speak with your insurer about updating the payment terms. For example, some companies offer significant discounts for insureds who pay quarterly or the entire policy term up front. You might also simply do this to save on billing fees.

• Regularly review your coverage to ensure that impactful details like company size, location, and business focus are updated with your insurer. This can drive down your pricing in some cases.

3. Additional Options That Can Save on Business Insurance

Outside of the more traditional methods mentioned above, you can also look for insurance savings in the following aspects of your business:

• Take a proactive approach to address broad risks to your company by speaking with an insurance agent about any coverage trends you should know about for your industry or business model. You should also take steps to prevent or reduce perils through employee safety training or installing a new sprinkler system.
• Speak with your agent about any carrier discounts that might apply to your business, including:
• Claims-free discounts
• Group rates
• Loss-prevention programs

The Takeaway

With business insurance premiums constantly rising, you aren’t alone in trying to find ways to whittle down this cost. Working with your insurer to identify key liabilities your company faces is key to creating a comprehensive coverage package. This approach will address these needs and is truly the best way to control pricing.