If you own a small business, you have to be extremely mindful of your expenses. It is important to be vigilant about your costs so that your business is as profitable as possible. However, since businesses are faced with uncontrollable factors and risks, business insurance is an important expense to prioritize. Nevertheless, you can still keep your business insurance premiums low enough to maintain ideal profit margins. Here are some tips on how to keep your small business insurance premiums low:
Increase Your Deductibles
Insurance should be viewed as a life raft, not a crutch. One way to save money on your insurance policy is to “self-insure” by increasing your deductible to a level that may seem uncomfortable. Deductibles are the amount of money you are required to pay in the event of a claim before your insurance plan kicks in. A higher deductible serves two main purposes: one, to lower your premium, and two, to ensure you don’t file frivolous claims. Insurance is all about risk, and higher deductibles tell the insurer you’re willing to take on some of that risk. So, how do you know what is the right deductible? Determine what amount makes you uncomfortable but won’t wreck you financially. If that figure is $1,000, $2,000, $5,000 or more, that’s where you start.
Bundle Your Insurance Products
Combining your coverage can result in rate deductions as well. If you need general liability, business property, and cyber liability insurance, you can combine those policies with the same company to save money. That is, instead of paying for insurance policies separately, you can bundle them into a single policy such as a Business Owners Policy. This policy can combine income loss, liability, and property insurance, among other coverages, into a policy with a lower rate. However, evaluate the policy first to make sure that you don’t pay for insurance you won’t need.
Reduce Your Risks
One of the factors that insurance companies use to determine the amount to charge you is the level of risk of your business. Therefore, the higher risk your small business is, the higher the amount you will pay. Reducing your risks can simply involve implementing smart risk management strategies in your business to decrease the likelihood of accidents occurring. For instance, you can implement workplace safety measures, theft-prevention programs, human resource training, and disaster preparation programs.
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