If you’re a small business owner, chances are that you’re constantly trying to juggle your different expenses. Payroll, maintenance fees, property costs, etc. These can all add up quickly. Throw business insurance into the mix, and things can quickly spiral out of control. That being said, the proper management of business insurance costs is essential to the functionality of your business.
Wondering how exactly you should check business insurance costs for your business? Use the following tips to have greater control over your insurance costs. But remember, these should only serve as a general guide. It’s also important to have a monthly (or quarterly) analysis of your insurance policy (not just once per year).
Look into Bundling for Greater Savings
It’s common for businesses to have several policies, all under different providers. An example of this would be a business that has a commercial property policy with company A, while also having a liability policy with company B. If you’re able to bundle your different policies under one provider (or umbrella policy), you’ll be able to minimize your total premium costs. Having a lower premium is important if you want to save money. An extra perk of consolidating your policies also means that the renewal process will be much more streamlined.
Analyze What You’re Deducting (or What You’re Not)
If you’re able to increase your deductibles, you’ll be able to lower the cost of your business insurance policy premium. Deductibles are essentially how much you pay (out-of-pocket) for a claim that’s covered by your policy. If you have a higher deductible, you have to keep in mind exactly how much money you would have leftover (in order to go towards whatever is needed after a claim has been made/covered). This website is an excellent resource for anything involving small business insurance.
Regularly Meet With Your Insurance Company’s Representative
This should go without saying, but it’s important to regularly meet with your business insurance agent (to review coverages, deductibles, etc.). This is important because businesses are always evolving, which means there may need to be a change in coverage (to your policy). It’s very possible that you’ll need to purchase additional coverage, or that you can even stop paying for certain coverage types (depending on the current needs of your business). The following list details when exactly you should get in touch with your insurance agent regarding your current policy:
- If you have significantly increased/decreased the number of people you employ
- If you plan on moving your business to a different location
- If you plan on making significant changes to how your business operates
When you’re speaking with your insurance agent, you should also bring up whether or not you need additional coverage. Some examples of additional coverage types that your business may or may not need include:
- Property insurance
- Commercial auto insurance
- Workers’ compensation
- Interruption insurance
The above list isn’t an extensive detailing of the different types of coverage that’s available, but it’s some of the main insurance types that you should look into purchasing. If you want to learn more about general liability insurance reviews (and specifically how audits are performed), check this blog post out.
Take Risk Management into Account: Strategize and Implement
This isn’t exactly a common topic among small business owners, but it should be. Risk management is an area of business that identifies various kinds of financial and operational risks (towards a business). Why is this important for a small business? Proper identification of risks can minimize costs if your business is hit with an unforeseen event (such as a lawsuit, property damage, etc.).
A good example of this would be a small web hosting company having its web servers hacked. If that business doesn’t have the proper insurance type, it would solely responsible for any associated costs (of repairing whatever damage the hacker did). That could very well translate to several tens of thousands of dollars (at a minimum) in various costs. However, if that business conducted some basic risk management, they would realize that they should have an insurance policy that would protect them from hackers.
If you have any specific questions regarding your policy, or coverage types, or anything related to business insurance, it’s recommended to get in touch with your insurance agent. Not only can they answer all of your questions, but they can also probably help you lower your premiums while they’re at it.