Take greater control of your company’s financial fitness by employing smart approaches to lowering the cost of your small business insurance.
Not even the savviest and most organized business owner can predict the unexpected. That’s why you’ve either invested in or are planning to invest in small business insurance. The right coverage is critical for maintaining the long-term health of your business and mitigating the risk of unforeseen events.
Not all insurance companies, policies, and plans are created equal. It can be difficult to determine what type of small business insurance coverage you need, and land on the policy that’s the best fit for your business. Once you do that, one of the first questions you’re likely to have is: How can I lower my insurance costs?
While small business insurance often represents a significant monthly expense, it can be a manageable cost when you put the right tools and practices into play. Depending on the size of your company, you may be paying for workers compensation insurance, unemployment, or disability, over and above general liability insurance for small business.
The costs can really add up. Fortunately, there are steps you can take to help you bring down the cost of your small business insurance.
How to Reduce Your Small Business Insurance Costs
Consider Raising Your Deductible
This is a straightforward way to bring down the overall cost of your insurance, but it’s not something you should do before first analyzing whether you’re equipped to pay the new deductible amount in the event of a claim.
For some businesses, the consideration of risk involved with catastrophic damage to property, and therefore assets, outweighs the consideration of raising deductible costs. For these businesses, it’s important to be able to rely on the greatest amount of assistance should the time of need arise.
For others who may not maintain the same level of risk, you can meaningfully reduce the overall cost of the policy simply by adjusting the amount of your deductible
Limit Your Company’s Risk
As a small business owner, you may end up paying more for insurance based on the level of perceived risk associated with your company. There are a number of best practices you can employ yourself, or preferably with the guidance of a professional insurance broker or business adviser, to lower your company’s risk.
Some steps you can take include putting measures into place to increase the safety of your workplace, assessing disaster preparation, and coordinating a thorough theft-prevention plan.
For example, to increase workplace safety, you could ensure employees have the proper onboarding and ongoing training, reward employees for consistently safe behavior, post safety signs and labels, and perform regular inspections on any tools and equipment. Implement safety protocols as a part of your daily business operations, and make sure to communicate your coordinated efforts with your insurance broker.
Inquire About Discounts & Packaged Deals
Finding the right small business insurance plan can be time-consuming and confusing, and finding the right broker can feel like an uphill battle that you just don’t have time to take on. If you’re going it alone, another way to bring down your insurance costs is to take advantage of low-hanging fruit in the way of discounts and packaged deals.
For example, many small businesses are eligible for discounts simply by virtue of their particular industry or organizational affiliation, while others may be able to take advantage of discounts because of the recent addition of a special training program or security measure. It may sound obvious, but you won’t know unless you ask, so make sure you’re exploring any and all opportunities for special discounts and packaged offers.
Trim Unneeded Coverage
Most small businesses are required to carry general liability insurance, but what other kinds of coverage are you paying for that may be unnecessary? Review your current insurance policy’s terms to flag any redundancies in benefits. If there are redundancies and overlap, there’s a strong chance you’re paying more money than required without receiving any tangible added benefit.
For example, a small IT firm with a team comprised mainly of remote freelancers may not need options such as professional liability insurance or umbrella coverage for a brick-and-mortar property, but may have more specialized needs, such as cyber insurance.
No one has a better understanding of your business than you. Make sure your insurance policy reflects your company’s unique needs, and don’t pay for what you don’t need.
Shop the Market for the Best Rates
It can be frustrating and time-consuming to do the necessary legwork and research to ensure that you’re getting the best insurance rates, but you may pay dearly if you don’t explore all of the options at your disposal. A general best practice is to shop around. Talk to multiple brokers or apply through a marketplace.
FINSYNC recently launched an insurance network that offers general liability insurance for small business along with workers compensation insurance and cyber insurance. The network serves as an ideal way for business owners to efficiently shop a carefully selected marketplace for the best insurance rates.
Simply fill out a single online application and, in a matter of minutes, you’ll be matched with a business insurance broker that’s ideal for your business, and receive offers from a variety of insurance companies competing for your business.
There’s no substitute for rock-solid cost management and accounting practices, but taking advantage of some of these commonsense methods can help you reduce the overall cost of your small business insurance over time.