Every dollar counts when you own a small business. Before making any major purchases, savvy business owners typically weigh their options. It should be no different when it comes to purchasing small business insurance—it definitely counts in that category of “major purchase,” after all.
And being hasty with decisions around small business insurance can end up costing you serious money in the long run.
Time for you to re-up on your small business insurance policy? Before you buy or renew, consult with these eight essential tips to help save you money. They’ll not only help you find affordable small business insurance that provides the right level of protection for your company, but they’ll make sure you’re covered like you should be … just in case.
1. Compare small insurance business quotes from multiple carriers.
Shop around and gather rates from multiple business insurance companies so you can compare prices and get the best deal. However, price shouldn’t be your sole consideration.
When you pick the best small insurance policy for your company, your ultimate goal is to get the appropriate coverage at the lowest rate. You do your business a disservice if you settle for a bargain policy that leaves you underinsured. If an accident happens, you’ll end up down and out. An insurance agent can help you determine whether your policy limits are appropriate based on your revenue, risk, and other factors.
2. Work with an independent agent with a small business insurance background.
Independent agents have access to multiple small business insurance companies, whereas captive agents can only sell policies for one company. Make sure the agent also has experience working with small business owners in your specific industry. That background helps them understand your unique challenges, the policies you most likely need, and the policies you can go without.
3. Bundle business insurance policies.
Small business owners can often save money by buying multiple insurance policies from the same company. For example, depending on the type and size of your business, you may qualify for a business owner’s policy. This combines general liability insurance with commercial property coverage at a price lower than buying the policies separately.
4. Install safety features, such as monitoring and detection systems.
Investing in systems that can help prevent robberies or property damage can pay off in lower premiums for commercial property coverage.
Think about investing in security upgrades for your business including:
- A hard-wired alarm
- Security cameras
Insurance companies often offer premium discounts for your small business if you can demonstrate that you’ve taken steps that reduce your loss exposures.
5. Take on a higher deductible.
Typically, taking on a higher deductible will lower your premium. But, that said, look into your finances—before you pick a policy with the highest possible deductible, make sure you can pay that deductible if you ever need to file a claim. Of course, small business insurance won’t do you much good if you can’t afford to use it.
6. Reevaluate your small business insurance policies each year.
It may be tempting to renew your policy without a second thought, but that might leave some serious money on the table. Instead, use that annual renewal opportunity to discuss your insurance needs with your agent. For example, if you downsized your business, your policies should reflect that change.
In addition, you should call your agent at any point in the policy term if you:
- Move to a new office
- Buy new equipment
- Increase or decrease your number of employees
- Buy a new vehicle for your business
- Change your service offerings
In general, it’s super important to keep the line of communication open with your agent to make sure you pay for the right amount of coverage.
7. Properly categorize your employees.
The way you classify a worker impacts your workers’ compensation insurance needs and costs. In most states, you must carry workers’ comp for your employees. If you aren’t sure if the worker is an employee or an independent contractor, you may want to check with an attorney.
The laws can be confusing—even interns can be considered employees in some cases. Do your research to avoid violating workers’ comp law or paying extra for insurance you don’t need.
8. Pay your premium in full.
When you purchase small business insurance, you can usually pay the premium in monthly installments or make one full payment upfront. While spreading out the payments may seem more cost effective, insurance companies often give you a discount for paying the premium in full.
If you aren’t sure which policies you might need, learn about common small business insurance options.