Ten Things to Think About: Saving Money on Business Insurance

All businesses need insurance; however, you do not need to insure against everything. If you did, you probably could not afford to stay in business. The following ten ideas should help you find and save money on the right kind of insurance for your business.

1. Investigate and prioritize. Determine how your insurance needs are effected by all applicable laws, any lease terms, and your mortgage financing. Then pinpoint the additional kinds of losses common to your particular business. Take a complete inventory of all of your business property and business risks. Then, determine the total value and whether it is worth insuring. Consider not insuring against highly unlikely events.
   
   
2. Consider choosing a higher deductible. Your business and financial situation may be able to tolerate a higher deductible, which should reduce your premium expense. You need to balance those premium savings against the likelihood of loss and the cost of the higher deductible.
   
   
3. Set up a risk management/loss reduction program. Insurers will often lower your rates if you put a programs and policies into place that will minimize losses from any sources especially fire, theft, and employee and customer injuries.
   
   
4. Compare rates. Once you have determined what kind of insurance you need, shop around for the best rate.
   
   
5. Review. At regular intervals, compare the price of your policy against your insurer's competitors. Prices for particular coverage fluctuate regularly. If you find a better rate with a competitor, ask your agent to match it.
   
   
6. Spread your risk around. Check whether some third parties you do business with may be able to share your burden or risk because of good business reasons to do so. For example, some of your suppliers may be willing to indemnify you for losses caused by their equipment.
   
   
7. Consider a package. If you can find a package that covers your needs, go with a package. They are often significantly less expensive than a self-designed plan. To determine whether a package suits your needs, you need to inventory all of your business property and determine its value and whether it needs to be insured, then compare the property and values to what is available in a particular package.
   
   
8. Find a group plan. Many trade organizations use their bargaining power to negotiate good rates for their members. You may not be able to cover all your risks in one group plan, but some of your risks may be covered by a group policy at a cheaper rate, than you could obtain that specific coverage for on your own.
   
   
9. Self-insure. For a few businesses, a self-insurance program will work; however, most small businesses do not have the funds to cover losses. Also, be sure to check all legal aspects of self-insurance, before heading down that road.
   
   
10. Use independent contractors. If your business involves working with third parties and using independent contractors, require them by contract, to carry their own workers' compensation and liability insurance naming you as an additional insured.

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