9 Ways to Lower Your Business Insurance Costs

9 Ways to Lower Your Business Insurance Costs

With the costs of running a business, it makes sense to save money wherever you can.

While business insurance premiums are a necessity for responsible entrepreneurs, there are ways a pragmatic business owner can get the best value. Look at rates from competing carriers alongside other methods for reducing premiums.

1. Minimize risks

Insurance carriers want to insure responsible customers.

A safety training program or risk management review will help reduce the possibility of making a claim, ensuring that premiums should avoid uncontrollable rate hikes.

Preventable losses are avoidable losses. As Benjamin Franklin said, "An ounce of prevention is worth a pound of cure," and he was talking about fire prevention.

2. Categorize employees properly

Many industries have high instances of worker injury, and being inadvertently placed in these categories may lead to unnecessarily high premiums.

Don’t downplay possible dangers. If you lie to your agent or broker, you may find yourself without coverage when you need it.

Notify your insurance company promptly when employees enter or leave your employ, as it will affect your premium costs. Consult with your agent or broker about appropriate coverage.

3. Improve security precautions

Security systems, fire sprinkler systems, worker safety programs, and driver training programs can reduce insurance costs.

If you deal with sensitive customer data, maintain robust security protocols to reduce exposure to cybercrime. Your agent or broker can help you identify problem areas, so you can institute a program that works for your business.

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4. Evaluate policies annually

Review policy renewals instead of automatically making the payment. Take the time to sit down and review it. Call your agent and ask questions about changes in your business, adjustments to your business model, or rate changes.

This is another opportunity to protect your business and reduce what you pay to protect it.

5. Buy in quantity

Just as you may get a discount when buying paper towels in bulk, it can help to buy your insurance in bulk, too.

Business owner policies are great for getting the insurance you require at a slightly better rate. Review your policies to avoid paying twice for the same coverage.

Specialty insurance may require a rider to procure suitable coverage.

6. Pay your premium up front

If you’ve been on a payment plan, you’ve likely been paying a fee for the privilege.

Reduce your final costs by paying up front. If it seems too much, save up for next year’s payment.

Paying up front shows your intention to commit to protecting your company. A cash-poor business may suffer from poor cash flow, so it’s important to address if it feels painful.

7. Modify your deductible

Increase your deductible to lower your premium.

Determine what your company can reasonably afford in the event of a claim. Each company will independently evaluate its needs and determine an appropriate deductible.

8. Look for discounts

Ask for discounts. Look for trade associations in your industry that can help you find cost reductions.

Specialized carriers may offer the policies you need at better prices. Look for industry publications to find opportunities to save.

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9. Buy sufficient coverage

Look for coverage that fits your company properly.

Too much coverage means paying for something you’ll never use, but too little coverage could leave you needlessly exposed. Work with a broker or agent to find the right amount of coverage.

While price is important, other factors such as the claims process or the rating of the insurance carrier are also important. Do your research and invest wisely when it comes to buying insurance.

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