Part of running a business involves making sound financial decisions. Before you can make these decisions, however, you need to review your options—one of which is your business insurance premium. Some common ways to save money on your business insurance are listed below, but your local independent insurance agent is the expert on coverages and options—so put his or her knowledge to use if you’re trying to save.
- Increase your deductible – Consider paying a larger portion of your claim before your insurance policy is used. By paying a higher deductible, you lessen the amount of money the insurance company pays and therefore are charged a smaller premium.
- Package your policies – Purchasing policies in a package, such as a Business Owners Policy (BOP), usually lowers the overall premium from what you would pay if you purchased individual coverages. This is sometimes called “bundling,” and simply means the package policy offers you multiple coverages for less money than you would pay if you purchased them separately. Think of the package policy as a restaurant buffet where you get the entire buffet for one price whether you choose every item or not, compared to ordering from the a la carte menu where you pay separately for each item ordered.
- Your history matters – Insurance rates can be based on the premise that “history repeats itself.” Therefore, for example, if you, as a business owner, routinely pay your personal bills late, it stands to reason that you will pay your business bills late, too. A business owner’s poor credit history affects not only his or her personal insurance, but also the business insurance premium. Review your personal credit history and work to build and maintain both a solid personal and business credit history. Most importantly—never let your business insurance coverage lapse due to cancellation for non-payment. Financially responsible businesses sometimes pay lower premiums. Driving history matters, too. And not just the business owner’s, but also the driving history of employees who drive your commercial vehicles. An option is to exclude these drivers on your policy. This means that if an excluded driver incurs a loss while driving your insured vehicle, the claim will likely not be covered. Therefore, the premium you pay does not include the potential losses of excluded drivers, which could reduce your premium.
- Be safety-minded – Follow all safety recommendations from your insurance company. For example, provide a safe working environment for your employees and enforce safety rules you have established. Not doing so may result in higher premiums due to the greater risk of injury. And, establish a disaster preparedness plan to protect your business property and employees in the event of a disaster. If you use subcontractors, show proof that you only use subcontractors who carry their own insurance. Mutual Benefit offers risk management materials free of charge to its insureds. Ask your independent agent for access to these free resources.
- Consult with your independent agent – Your local independent agent is the best source of advice on the coverages you need to protect your business. And, because your independent agent represents more than one carrier, he or she can quote your coverages with multiple carriers to get not only the best price, but also the best match for your unique coverage needs.
Sources: www.iii.org, www.amercianexpress.com