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How to Lower Business Insurance Premiums

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As a business owner, you know that it’s important to try and save money wherever possible. Lowering your insurance premiums is one way to do that. There are a number of proven methods of saving money on insurance, but reducing coverage simply to lower your costs isn’t the best way to go about it. Instead, you may want to consider these tips on how to lower your business insurance premiums.

Shop Around

If you’ve been in business for any length of time, you no doubt have an insurance carrier that you trust. Business people who are just starting out need to find an insurance provider who will give them the service they need at reasonable rates. In either case, it wouldn’t hurt to be on the lookout for an insurance company that can increase your bottom line by providing adequate insurance at a price that can’t be beat. Because the insurance industry is competitive, carriers are continually tweaking their insurance packages. Keeping abreast of the latest discounts and bundling offers that become available may significantly reduce your premiums. Take some time and search the Internet for insurance companies that offer their services online. Get quotes from a few different companies and take them to your present agent, if you have one, or compare them with quotes from the more traditional brick and mortar insurance companies. Your insurance agent may be able to offer comparable service at the same price, or for even less.

Raise Your Deductibles

A practice that is standard within the insurance industry is to lower your premiums if you raise your deductibles. Although it isn’t smart to carry a deductible that isn’t within your reach, the savings on insurance payments can be significant. Keep in mind that you will need to have cash on hand to pay the deductibles. Another thing you can do to save a little money on insurance premiums is to pay for small problems yourself instead of filing a claim, because most insurance companies will raise your rates for repeated claims. The best way to alleviate the cash flow problems associated with high deductibles or minor claims you pay yourself is to open a savings account designated for that purpose–keep in mind that any deductible must be paid before the insurance company will write you a check–so having ready access to cash is imperative. If you deposit money into the savings account on a regular basis, you’ll know you’re protected if a situation arises and you need cash fast. An added bonus is that if nothing comes up, the money will continue to accrue interest.

Increase Safety in the Workplace

One of the best methods of reducing insurance costs is to institute a higher standard of safety features in the workplace. Increasing the safety of your workers, or the people who visit your property, will allow you to reduce your liability coverage and save a little money on insurance payments. If you take this route, you should make sure your workers observe the new safety procedures you’ve installed, and that they’re properly trained to do so.

Review Your Current Coverage

Every once in awhile it’s a good idea to review your current coverage and make sure you aren’t over or under insured. Carrying just the right amount of insurance to protect you in the event of a financial disaster is what you’re looking for. If you’re paying for coverage you no longer need, that part of the policy should be rewritten. For instance, if the machinery used in the production of your merchandise became outdated and you replaced it with more efficient equipment that costs less, then you’re paying too much for insurance and need to review your policy.

Find Out About Discounts

When you’re reviewing your policy, it may also be a good idea to talk to your insurance agent about the possibility of discounts, especially ask if there are any new price reductions available since you talked to them last–the qualifications could have changed, or you may now be eligible due to the length of time you’ve been doing business with the company. Most insurance carriers will reward longtime customers with price reductions. Ask if you’re eligible for group rate discounts, and if not, what it would take to qualify. It may be worth your while to consider joining a group or organization that qualifies for group rates.

Guest post from Bailey Harris. Bailey writes about insurance quotes and related topics for InsuranceQuotes.org.

 

About the author: Paper Free Invoices started out as a small blog for my invoicing software business Paper Free Billing but has morphed into something much more useful. I’ve really enjoyed reading the guest articles and speaking with guest publishers so much so I’m always looking for talented bloggers to contribute. If you have any questions or feedback on this article, please find your voice in the comment section, we will try to answer every genuine comment!

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  • Nerissa Hedge

    It doesn’t look like there is much a business owner can do about his premiums but every tip counts and that will equal money saved. With a lot of insurance agencies, you have to ask about the discounts, they won’t just offer them up for us.

    • Also assuming that the renewal quote is actually the sharpest price your current provider offers is also not usually the case!

  • Phyllis Moore

    This is great info. I was not aware that business insurance could be negotiated in much the same manner as auto insurance or home insurance or that there are so many discounts available. This is very good to know.

    I also like the strategy outlined for raising your deductible responsibly. It’s so easy to see just the short-term benefit of a lower insurance premium without factoring in the potential out-of-pocket costs and making the necessary provisions.

    Yes, very helpful!