As a small business, you know the importance of commercial insurance, and if you bought a policy, you’re taking the correct step.
But when did you last review your policy? Are you sure you’re getting the best rate? There are ways you may be able to lower your premiums, retain great coverage, like general liability and paycheck protection insurance, and thereby increase your cash flow and profitability.
These four steps will help you lower your insurance premiums while keeping the coverage you need.
Step 1: Compare Quotes
This step comes first because it’s the easiest. You can collect several quotes from different providers and see if you could save just by switching.
When you’re comparing quotes, remember that customer service and financial stability matter as much as price. So once you find the companies with the best rates, compare those other things to make sure you’re dealing with reputable companies that will stay solvent and treat you with respect.
Step 2: Review Your Coverage
When you first bought a business insurance policy, your company may have looked different than it does today. Maybe you’ve expanded, or maybe you’ve narrowed your specialty. Perhaps you have more employees today than you did when you started.
As your needs change, your business insurance policy should change. If you’re paying for coverage that’s no longer applicable to what you do, you’re wasting money. For example, if you have commercial auto insurance but now conduct all your business virtually, you don’t need to pay for that p
Sometimes, reviewing your coverage may mean you need more coverage, which will likely cost more, but if you can eliminate some coverage and add others, you’ll get the right coverage, which is valuable.
Step 3: Examine Your Deductible
Build a financial cushion so that if you have a rough month, need to replace equipment, or something else comes up, you can cover those additional costs. Another benefit of a healthy emergency fund is that it lets you increase your insurance deductible.
As long as you have the money available to use, you can confidently increase your deductible and save money on your monthly premiums. It’s risky to increase a deductible if you don’t have savings built up, though, because if something happens, you’ll be responsible for the deductible amount, but you won’t have a way to pay it.
So, if you haven’t already built your business savings, make that one of your business goals because doing so can lead to significant insurance savings.
Step 4: Decrease Your Risk
What this looks like in practice depends on the kind of business you operate. If clients come to you, you may be able to take steps to increase the safety of your property and thereby lower your premiums.
Training employees is another way to mitigate risk. From cybersecurity to workplace safety training, the more you and your employees know how to spot risks and prevent situations and damages that could cost you, the less likely you’ll ever need to file an insurance claim.
Ongoing training is good practice, but it can also help with your insurance premiums. If you can build several years of claims-free history, you should be able to qualify for lower premiums.
Don’t accept high premiums until you’ve made sure you can’t find a way to get the coverage you need but pay less for it.
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