If you’re finding in recent years your margins are slimmer than you would hope, below are some ways to make sure your insurance costs are not one of the things putting stress on your finances.
Get the insurance coverage plan you need
It’s important to get the coverage you need, but be sure to not overspend on coverage you will not utilize.1 When you start your business, periodically take stock of your risks and assets and cut any coverage you aren’t using.1 Did you stop using business vehicles? Have you consolidated buildings or other assets? If you can, prioritize areas of importance and cut coverage where it isn’t needed.
Find out if your business is eligible for insurance discounts
There are a few instances where your business might qualify for an insurance discount. If you have necessary coverage but haven’t submitted claims in a while, your provider might offer you a discount.1 Other providers might offer a discount if you implement safety programs or a loyalty discount for long-term coverage.2 It never hurts to ask.
Bundle your insurance policies
A common way to save is to utilize a business owner’ s policy, or BOP.1 A BOP allows smaller businesses to bundle a few types of coverage together for a lower price than if they got them separately.2 These policies don’t always include everything your business will need, so be diligent to research what policies you might need outside of the BOP—some examples include auto insurance and worker’s compensation.1
Increase deductibles based on your affordability
There is some risk involved in increasing your deductibles. But if you feel confident you can risk paying a little more in the case of an incident, you can raise your deductible, which can lower your premium.2
Maintain a good credit score
Good (or bad) credit doesn’t always mean a change in coverage price, but in some states, a higher credit score allows insurers to offer certain coverages–like commercial auto insurance–at a discount.1
Improve risk management plan
A risk management plan allows you to see and prioritize what risks your business has—and to what extent those risks need coverage. Implementing safety programs, wellness incentives and evaluating employee driving records are some examples of ways to mitigate risks and save.2
Get quotes from different insurance companies
Just like with any purchase, you have the ability to shop between different insurance providers to find the right coverage at the right cost. Because insurers use algorithms to provide a cost, it will vary from provider to provider.1 It is also a good practice to shop your insurance every few years to make sure you’re getting the best price.1 If you work with an independent agent, they can help you compare price and coverage from multiple carriers.
Grow your business with additional resources
Insurance is an important part of keeping your assets and business secure, and although it can be costly, the above strategies can help you find ways to cut costs and maximize profits. Learn more about the insurance you need to stay safe and find additional resources for small businesses.
