So, you are running a business and you have done your research to find the best possible insurance policy. You’ve got all the necessary cover in place, with adequate limits and appropriate excesses. You are covered for everything that could possibly go wrong, but…
You still can’t help but feel like you are paying too much for your insurance policy. And when you see your friends getting lower premiums than you, you start to think that maybe there is something wrong with your policy or maybe even something wrong with the insurer!
But don’t worry. In this article, we will be looking at some effective ways to save money on your business insurance without jeopardizing the scope of coverage.
Shop your coverage with several providers
If you’re only with one provider then you’re selling yourself short. Shop around for the best deal, because in some cases, what seems like a good deal, might not be the most beneficial coverage in your situation. Always ask for additional information when deciding if you should accept quotes from providers. This will give you more details about what each insurance is prepared to offer so that you can do more than just compare prices. You will also want to find out what is covered and compare policies side-by-side so that you don’t overlook large gaps in coverage when shopping for cheaper rates on your business insurance.
Combine your policies
Often business owners may not consider how they can combine some policies together. For example let’s say you have a personal life insurance cover and business insurance for indemnity, public liability and directors insurance (covering for illness of the director or securing the shares in case of more severe cases i.e. death)
There could potentially be a cross over in the personal life insurance and directors insurance, therefore if you list all insurance you are covered for both personally and in business it will help you compare if there are opportunities to combine and ultimately make savings.
Evaluate your protection and your risks
Before you even consider insurance, it’s important to evaluate your risks and plan for them as best as possible. Take some time to brainstorm some risks that could impact your business such as loss of inventory or the theft of a shipment due to a shipping accident. After identifying the most potentially damaging things that could happen, make a list of ways they can be avoided or mitigated through good management practices and policies. We also suggest asking your business partners what they think they would need if one of your factors comes up. Working together can save everyone from financial risk later on.
Most small business owners don’t have a clue to how much business insurance costs, and because of this, they either pay too much or choose cheap but inadequate insurance for their company. To make a wise decision on which policy to use, write down your business’s basic needs first, then go through the packages available so you can come up with the best value. A lot of websites run comparison surveys where you enter some information about your business and get quotes from various providers so you can find low-cost but high-quality coverage.
Another consideration is how should you pay for your cover, many providers may offer a discount for paying the full year upfront, but always remember to consider your cash flow before making these decisions, as if you paid the full year say on an interest-free credit card, you could still get the savings without an upfront hit on your cash flow.
Do you have adequate excess cover?
Excess cover is the value of a claim not covered by your insurance company For example if you have a £250 excess, the business will be liable to pay the first £250 of the claim. It is quite common for a higher excess to offer lower monthly premium payments, which might be seen as a benefit today but is it the right decision? Depending on the potential value of claims if you have an excess of say £750 would this benefit you, based on the potential size of your claims?
When choosing your cover make sure you compare your monthly payments in line with the relevant excess claims as what may seem like a deal on paper, could cause longer-term issues.
If you want to save money on your business insurance, then you’ll need to do your research it is best to do this prior to the insurance coverage ending so you have time to get all your facts. If you put a note in your diary as a reminder at least 2 months before the insurance runs out, it will give you enough time to start to shop around!
If you leave insurance to the last minute and allow it to renew automatically then there is a risk coverage will not be correct, for example, staff levels may have changed, so it is important to look through the policy documents so you are clear what levels you need.
Don’t focus solely on cost
With the business insurance industry consisting of many competitors and having such a large focus on price based searches online, it is important that this isn’t the only factor that goes into your decision making process.
You need to consider your insurance needs. Certain policies like life insurance, professional indemnity insurance and critical illness cover can help you prepare for the future, leave something behind for your loved ones if anything unfortunate happens or even help you out financially in an emergency situation. The last thing you want is to lose everything that you own after all your hard work just because you didn’t take the time to find out what type of protection insurance will best suit your business.
The cost of insuring a small business can be high, but there are ways you can reduce the amount that is spent. This article shows how to do this by looking at types of cover and comparing them with each other. It also looks at some tips for reducing costs further.