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How to Lower Insurance Premiums: A Guide for Business Owners

Posted August 26, 2019 by EasyFinance.com to Insurance 1 0

If you own a business, there are certain types of insurance you'll have to buy. Learn how to lower insurance premiums here to save money.

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Much like individuals, businesses can benefit from having insurance. As a business owner, you probably know you need to have some kinds of business insurance.

General liability and other policies help keep your business safe, but they can also cost you. In fact, more than half of small businesses pay between $400 and $600 for general liability alone. That’s just one of the several types of insurance your business may be required to have by law.

Have you ever wondered how to lower insurance premiums? With this guide, you’ll be saving in no time.

How to Lower Insurance Premiums with Bundles

If you’re wondering how to lower insurance costs, the first thing you should do is consider a bundle. By putting all your policies together, you could be eligible for a discount.

You may also be able to save on the administration fees associated with each policy. Don’t forget that having your policies together could save you a bundle too. You’ll spend less time filling in paperwork or wrangling with providers over claims.

Remember to check with your state about the types of business insurance you need. Bundling may seem attractive, but it could end up costing you more if you buy policies you don’t need.

Shop Around for Lower Insurance

You should be reevaluating your insurance policies on an annual basis. If you feel you paid too much for a policy or it didn’t do enough for your business, it’s time to look elsewhere. Reevaluate whenever your situation changes, whether you moved locations or bought new equipment.

Before bundling your insurance policies together, be sure you have the right provider. Shop around and get some quotes. You may find one provider offers a great deal, while other providers aren’t as budget-friendly.

Don’t forget to talk to small insurance brokers and agencies. Look for someone with a background in small business insurance. They may be able to find you the deals you can’t get on your own.

Ramp up Your Safety Efforts

Your history is one major component of the price you’ll pay for insurance. If an insurer looks at your history and finds you make many claims, chances are they’ll want a higher premium.

There’s not much you can do about the past, but you can show insurance providers that you’re working toward a better future. Take recommendations about safety and other preventative measures to heart.

You could invest in a new monitoring or security system for your office. You could also invest in your employees, offering them better anti-theft or cybersecurity training. Deadbolts, sprinkler systems, and other safety features also show your commitment to safety.

These sorts of efforts help negate risks, which can reduce the number of claims you make. Not only do they help lower your insurance, but they also help avoid the situations that make claims necessary.

Take a Higher Deductible

Another way to lower your insurance costs can be to take a higher deductible with your policy. This can be a risky move for some business owners, so take a look at your finances before you do it.

Generally speaking, a higher deductible will lower your premium. That’s because it lowers the risk for the insurance company.

The higher deductible means you’ll need to pay more out of pocket before the insurance kicks in. If you make many claims, having to pay more money out of pocket might end up costing you more.

This can be a smart move if your risk level is low, you rarely make claims, and your business is in good order. Make sure you always have enough coverage to meet state minimums.

Pay Your Policy in Full

Suppose you’re looking for lower car insurance for your commercial vehicles. After all, an annual policy might cost you more than $1,000 per vehicle. A simple way to get a discount might be to pay the policy in full.

Paying your premiums in monthly installments can make the payments more manageable. The insurance company may offer you a discount if you pay the full annual amount.

Always ask if you’ll receive a discount for doing this, and be sure your business can handle it.

Consider Your Equipment

Let’s look at auto insurance policies again, this time for a tow truck company. Your tow truck insurance must meet minimum coverage guidelines set out by your state.

The type of vehicle you’re using actually plays a role in determining your premium. A wheel-lift tow truck or a flatbed tow truck will cost more to insure than a conventional one.

You’ll also have to consider what your equipment is doing. A company van that’s only occasionally used will be cheaper to insure than one that’s on the road 24/7.

Classify Employees Correctly

Another important type of business insurance to consider is workers’ compensation. Depending on the size of your organization and your industry, you may be required to have it.

How much you pay will depend on many factors, such as which state you operate in and the number of employees you have. Your industry and the nature of the work may also influence pricing.

Another factor is the classification of your employees. The laws can be confusing, so you may want to check in with an attorney before you buy. If you don’t, you may end up under- or over-insuring employees.

Keep in mind that there are special rules about contractors who work for you. Even interns can be considered employees for insurance purposes.

By classifying your employees the right way, you’ll be able to accurately assess workers’ compensation insurance needs.

Get Started Saving Now

Now you can see how to lower insurance premiums with ease. You can try one of these tips or all of them.

If you’re looking for the best financial products, get started with our site. We can help you find better business insurance policies faster.

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