How to Save Money on Business Coverage Premiums: A Guide for Entrepreneurs and Small Business Owners

Business owners and entrepreneurs understand the importance of having the right coverage to protect their business from unexpected problems. A general liability policy or BOP may be sufficient for some companies, but additional coverage options such as business interruption can save a lot of money in the long run if a claim needs to be filed. Ted Devine, global director of AIG 200, gave the example of a fire that destroys his shop window or office.

Reducing Premiums

The fastest way to reduce premiums is to increase the deductible, which is the amount you must pay when filing a claim for an accident or other event that qualifies for coverage.

Just make sure your business can pay that deductible amount up front if a claim needs to be filed. Deductibles are a type of self-insurance and are typically included in property and auto policies. Another way to reduce insurance premiums is to pay in advance for 3, 6, or 12 months of insurance at a time. Many insurance providers offer discounts for this type of payment. It is also important to meet with an independent insurance agent to discuss coverages and how they fit your business.

The higher your company's risk, the more your insurance company will charge you for coverage.

Workers' Compensation

Workers' compensation helps you cover an employee who suffers a bodily injury, but it will cost you between 1.4% and 2.9% of an employee's total compensation. If you have a small number of employees, this can be very manageable. By evaluating your needs, considering your options, analyzing your current resources and consulting with subject matter experts, you'll be prepared to select the best small business insurance for your business.

Risk Management

Risk is an inherent part of business ownership, so it is important to select and buy the right coverage without paying for what you don't need. Do your homework and make sure that the deductible amount you select can be managed as an out-of-pocket expense.

A business insurance policy is the best way for an entrepreneur or small business owner to plan and mitigate some of the risks involved in their daily operations. Getting the right coverage at the right price protects your business and can contribute to your bottom line. Evaluate your needs, research and establish a relationship with your insurance agent or broker to protect your business and business objectives. Sometimes, coverages can be redundant or you may continue to pay to cover a part of your business that is significantly different from what you had when you bought the policy. Business owners and entrepreneurs should choose the right small business insurance that meets their needs to protect them from unexpected problems. Insurance deductibles and premiums often represent lower out-of-pocket costs than you can plan for, as opposed to the high cost of replacing or repairing business assets and the loss of income without small business insurance.

Jenny Kizzia
Jenny Kizzia

Professional food ninja. Proud coffee expert. Friendly pop culture guru. Certified beer buff. Beer scholar.