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The cost of small-business insurance can vary widely. Taking the following steps can help you find cheap business insurance that still provides the protection you need.
Here’s how to start your search for cheap small-business insurance.
1. Bundle the policies you need
Different types of business insurance protect your business against different risks. Most businesses need several kinds of coverage.
Type of insurance
When it protects your business
Who needs it
Find a provider
If a third party or their property is harmed as a result of your business activity.
All businesses. May be required by a landlord or contractor.
If you’re in an auto accident while working or in a company vehicle.
Businesses that use vehicles in their operations. May be required by law.
If an employee is injured on the job.
Businesses with employees. Required by law in most states.
If a client accuses you of making a mistake or giving them bad advice. This is also known as errors and omissions insurance.
Businesses that provide services for a fee. May be required by law or industry regulation.
If your manufacturing or retail space, office, or assets like equipment or inventory are damaged and need to be repaired or replaced.
Businesses with owned or rented space or a significant amount of property. May be required by a landlord.
If your business can’t generate revenue for a period of time.
Most businesses with recurring expenses.
If a product you manufacture, distribute or sell causes harm.
Businesses that manufacture, distribute or sell physical products.
You may be able to get cheaper business insurance by combining multiple policies together.
One way to do this is by purchasing a business owner’s policy, or BOP. These policies usually include general liability, business property and business interruption insurance. Insurance companies typically charge a lower price for a BOP than they would if you bought all three policies individually.
2. Shop around
Every quote you request from an insurance company will be a little different. By getting quotes from multiple providers and comparing them, you’ll have an easier time finding cheap business insurance.
You can get business insurance quotes online from insurers or through a marketplace. You can also reach out to companies directly, or work with a licensed insurance broker or agent for personalized help.
Once you have quotes in hand, compare what they cover and how much they cost.
Most insurance policies are written on standard forms that lay out what kinds of losses are covered under specific circumstances. Make sure to note any exclusions — what the policy doesn’t cover — as well as riders and coverage extensions. If a less expensive policy excludes something important to your business, talk to the insurance company about adding it in, or consider other options.
Quotes vary because every insurance company uses a different formula to calculate premiums. The most expensive quote doesn’t necessarily provide the best coverage.
3. Customize your policies
The less coverage your business insurance policies offer, the less expensive they’re likely to be. You can adjust how much protection your policies offer in multiple ways, including:
Choosing a higher deductible.
Lowering your policy’s limit.
Changing how your property is valued.
Deductibles and policy limits are part of every insurance policy. With a higher deductible, you’ll have to spend more of your business’s money to cover expenses before insurance kicks in. And with a lower limit, your insurance policy may not cover large claims in full.
Property value relates to business property insurance, which allows you to choose “actual cash value” or “replacement cost coverage.” These terms describe how the insurer will determine the value of property that has been damaged or destroyed. In general, actual cash value is cheaper than replacement cost coverage, since property is worth less when you account for depreciation.
4. Prepay your annual premium
One of the simplest ways to reduce your insurance bill is to pay premiums upfront each year rather than making monthly payments. Depending on your insurance provider, how much money you can save will vary.
5. Limit claims by managing your risks
Lots of the factors that determine the cost of business insurance, like your industry, number of employees and value of your property, are fixed. But two important factors are variable, and largely within your control: how often you file claims and how large those claims are.
By limiting risks in your workplace, you can help reduce the frequency and severity of accidents and mistakes. Things you can do include:
Making sure employees are well trained on working with dangerous equipment or materials, or performing complex tasks.
Investing in software or tools that help protect sensitive customer data against hacks.
Creating procedures for dealing with issues that could lead to accidents or errors.
Keeping your property well maintained to reduce the risk of accidents like leaks and electrical fires.
Some insurance companies provide customers with risk management materials to help with this. Travelers, for instance, offers training in ergonomics, industrial hygiene, property protection and more, plus a library of several hundred safety videos.
Maintaining a safe and secure workplace won’t necessarily save you money on business insurance right away. But by limiting the size of claims and how often you file them, you can help keep your future premiums lower.