10 ways to save on Business Insurance

10 ways to save on Business Insurance

Business insurance is also known as commercial insurance.  There are insurance policies for just about any type of business or business risk.  The core focus on any business policy should be to adequately protect the property and the business from losses/damage and liability.  Below are 10 ways to help you save on business insurance.

1)      First, consider your “business specific”  insurance costs: You would be surprised on how many times I come across prospective business owners who start investing heavily on a startup business venture only to find out that they did not budget for the insurance costs.  In some cases (such as for Limousine, taxi, or trucking services), the insurance costs are a major expense in operating certain types of ventures.

2)      Have the Right amount of Liability protection:  For small businesses, even a one man operation, always consider having a minimum liability limit of $1,000,000/$2,000,000.  The 1 million is per incident, and the 2 million is the “aggregate” total limit per year; anything less than this coverage amount, can put your business in serious financial risk in the event of a major lawsuit.

3)      Group Rates:  Some professional organizations offer group rates.  So always check first to see if this is available for your type of business or profession.

4)      Increase your deductible:  The higher the deductible, the lower the cost of your insurance.  So get a quote for different deductibles to help determine which works best for your budget.

5)      Lower your liability Risk:  Among many things to look out for; wet floor surfaces, cracked or crumbling steps, cracked windows, parking lot with uneven, cracked or broken areas, lose handrails, exposed electrical outlets, and related exposures.  Many of these somewhat minor details could result in a sizable lawsuit if they lead to a serious accident.

6)      A Central Alarm system:  This type of security system will save you money on your business property insurance.  They automatically alert fire and police authorities in the event of a fire or break-in.

7)      Consider a package policy.  Instead of just a General Liability policy, you can save money by combining other risks such as property (i.e. inventory, or the building), an umbrella policy, business income, a commercial auto, etc., to your existing policy.

8)      Evaluate regularly your insurance coverage needs:  As your business grows, so should the amount of coverage that you should have.  Underinsuring a business is a sure way to disaster; so make sure you evaluate your insurance needs at least yearly.

9)      Relocate:  Insurance costs vary throughout the country, so where feasible, you may consider relocating to a different state or location.

10)   Avoid frivolous claims.  Most insurance companies will rate you based on any losses (claims) filed over the past 5 years.  It sometimes makes sense to consider not reporting smaller losses and just absorbing these costs, since any size loss will impact your rate upon renewal, or when changing insurance carriers.  The former pertains primarily to property losses (i.e. broken windows, spoiled food). Of course, potential liability exposure should always be reported as you will not know the extent of the liability damage for several months or years.

I hope this information is helpful.

Robert Hernandez, President, Frontier Insurance Agency, LLC