Reducing Your Business Insurance Costs
Lower Your Insurance Premiums by Following These Dos and Don'ts
If you run a business, one of the options for you is to lower your business insurance costs. If you can bring these down, it can raise your operating margins considerably and allow you to do more with the budget you have available.
But what are the key do’s and don’ts that experts recommend to help you lower premiums with insurance providers?
Do shop around and compare quotes
One of the most obvious strategies to bring down your business insurance premium is to shop around and compare quotes. If you can get into the habit of doing this regularly, then you will always have the lowest quote available from any provider.
If you run a business and you are in 6- or 12-month contracts, make sure you plan your comparisons. We recommend doing them every 6-12 months so that you can always be on top of your game.
Do bundle policies
Another pro strategy is to bundle policies. This is where you go to the same insurer for multiple different risks that your business faces. This approach always results in a lower premium because of the way the risk works. When an insurer insures you for a single risk, they have to deal with that risk and the risk alone. But when they can diversify across risks, they can reduce their exposure by insuring you for risks that aren’t common. For example, if you forget workers’ compensation and vehicle insurance for a single insurer, you’re likely to pay less in combination for both.
We suggest talking to your insurer about what they offer. Different insurers will have different discounts. The best option is to go with a single insurer that covers most of all of your risks.
Another piece of advice that we recommend is reviewing and paying your premiums upfront annually, while attempting to lower the cost by paying on a per-monthly basis. Overall, you’ll wind up paying much lower. Annual payments tend to carry a discount of around 10-20%, so they’re well worth exploring. Unless, of course, you think you’ve got better use for the money. It’s going to result in a higher return over the course of a year.
Do upgrade your premises
Finally, it’s a good idea to upgrade your premises in a way that will lower the risk at an insurance festival. When you make a decision on having a business building, you should always be thinking about how it will look through the insurers’ lens.
For example, do you need a fire door? Could you lower your premiums by installing sprinklers and fire suppression systems on your premises? What about crime? Could you suppress the risk of criminal activity by putting up a perimeter fence or installing CCTV cameras?
Don’t under-insure
One of the biggest mistakes that people make as a business is to under-insure. If you skip essential coverage and rely on only a minority of protections, then you could significantly damage your ability to thrive in the long term. Even if you think the short-term savings are worth it, they’re well weighed by long-term risks. Just consider things like professional liability insurance. Claims against you could rapidly run into the millions of dollars.
Don’t you stick with the same insurer just because you know them
Another piece of advice is not to stick with the same insurers because insurers are in the game to make money; they are not your friends. Therefore, they will usually try to raise your premiums every year whenever they can. Don’t fall into this trap by swapping regularly or telling them that you’ve seen a cheaper deal elsewhere.
Don’t overlook discounts
We also suggest you avoid overlooking discounts for business insurance when you can. Sometimes, businesses can make the mistake of failing to take advantage of these and wind up paying higher premiums overall — something most of them would like to avoid.
If you’re currently unaware of what discounts are available at your insurer, ask them. See what they have available. Usually, they’ll be able to tell you what’s on offer and how they can help you.
Don’t file unnecessary claims
One of our final pieces of advice to you is not to file unnecessary claims. Even minor claims on your business insurance can trigger deductibles and an increase in your premium that lasts for years. Insurers will pay out for minor incidents, but in the long term, they’ll punish you. Therefore, only use your insurance for the biggest claims that you really can’t absorb in the term.
So, which of these pieces of advice will you follow?
