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PROTECT YOUR BUSINESS

Business Insurance Cost: How to Save More on Your Policy

7-minute read

This business owner on the phone is currently saving on his business insurance cost.
Mariah Bliss

Mariah Bliss

5 March 2021

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There are three certainties in life: death, taxes, and likely the assumption that a business insurance policy is going to cost a lot of money.

Sure, policies can sometimes be expensive, especially if you’re just starting your business and you need to watch your business insurance cost.

Fortunately, the 11 tips in this article will help you learn how to save more on your business insurance policy.

So whether you just started doing your own thing or you’re looking to score a less expensive policy, check out our suggestions on how to help reduce your business insurance cost.

11 Steps to Save on Business Insurance Costs

1. Know what risks you need to cover.

One of the best ways to save on your business insurance costs is to know the exact risks that are most common in your line of work.

Here’s why: When you know the risks you might face, you’re better equipped to buy the insurance coverage that actually covers you.

Otherwise, you run the risk (no pun intended!) of overpaying for a business insurance policy that covers situations that may never happen to you in your industry.

2. Find out your state’s requirements.

Know what types of business insurance policies you may need to get in your state. If you’re trying to limit your purchase to what you have to buy, your state’s insurance requirements can typically give you a good blueprint to consider following.

If you’re a contractor, you can check out our contractor licensing hub to see the types of insurance policies you’re usually required to have depending on your business type and the state your business is located in.

3. Ask for recommendations from people you know.

Know anyone in the same line of work as you? Consider asking them who they use for business insurance!

Getting feedback from other people in your industry can help you narrow down which business insurance providers may be more likely to offer an affordable policy.

Plus, it can potentially help save you the time that would be otherwise spent trying to get quotes from carriers that may be outside of your budget.

4. Do some research online.

A bit of quick research online can help you get a good sense of how much your business insurance policy may cost.

That means you can better understand if you may be overpaying for a specific insurance policy.

Here’s a head start on your research: At Simply Business, our general liability policies typically start at $25.95/per month,* depending on your business type and coverage you may need.

5. Embrace comparison shopping.

Let’s face it, as a small business owner, you don’t have tons of time to submit the same information to multiple insurance companies.

That’s where Simply Business comes in.

We’re an online insurance brokerage platform that uses a single questionnaire to help you find quote options from some of the top business insurance providers in the country. Best of all, the quotes are compared side-by-side, along with their prices.

That means you can do comparison shopping from a single website — and all in under 10 minutes.

Ready to see how much you could save on your business insurance policy? Get started with our free online quote tool!

6. Talk to an agent.

A licensed insurance agent is a great resource for people who don’t know what type of coverage they need, or who don’t want to deal with online quote forms.

And if you count yourself among them, no problem!

Just give one of our U.S.-based agents a call at 844-654-7272 to get started. Our agents can help you find a more affordable business insurance policy that fits your needs and your budget.

7. Bundle whenever possible.

If you need to get more than one type of insurance policy (like general liability insurance and tools & equipment coverage or professional liability insurance and workers compensation), it’s a good idea to see if you can bundle your policies.

Here’s why it usually works: Some insurance carriers offer better prices for customers who are willing to get multiple policies in one place.

8. Opt for a higher deductible.

A quick and effective way to save more money on your business insurance policy is to get one that carries a deductible.

Many business insurance policies carry a $0 deductible, which is great news if you’re looking for ways to reduce your financial obligations if you ever have to make a claim.

But there’s a tradeoff there in that having a $0 deductible means the price of your policy will typically be higher than one with a $500 deductible (meaning you’d have to pay $500 out of your own pocket before your insurance policy covers the claim).

Bottom line: You can save more now by opting for a higher deductible, but you may want to consider avoiding this option if the deductible is so high that it could cause financial strain if you were to make a claim.

9. Don’t pay for coverage you don’t need.

Another benefit to understanding what’s in your coverage is that you’re better equipped to know if you’re paying for something you don’t need.

For example, if your policy has a per-occurrence limit of $2,000,000 (meaning you can make a claim for an incident that caused up to $2 million in property damage or a third-party accident), but you’re a handyman who works on small projects, so it’s unlikely that you’ll run into expensive claims.

In the above example, you as a handyman could save more money by decreasing your policy’s per-occurrence limit to $1 million.

And if you’re not sure if you’re overpaying for coverage? You can have a licensed insurance agent walk you through what’s covered!

At Simply Business, our agents can help you determine which policy limits are typically appropriate for your type of work.

10. Decide between annual vs. monthly premium payments.

If you want a more budget-friendly insurance policy without skimping on coverage, consider finding a policy that offers monthly premium payments versus an annual premium.

If available, monthly payments are easy to set up: You can typically expect to put 25% down on the total price of the policy, then make payments for 10 months on your policy (your last month is usually covered in the down payment).

Not sure if a monthly payment option is available with the policy you’re eyeing? Don’t hesitate to ask — the carrier may offer that option.

11. Make sure your subcontractors are covered.

If you’re a contractor or work in an industry that uses subcontractors, it’s a good idea to make sure the subcontractors carry their own insurance.

By taking this step, you’re essentially “transferring” some of the risk of a claim to them.

You could even take it a step further by requesting to be placed on their policy as an “additional insured.”

Plus, working with subcontractors who carry their own insurance may make customers more likely to feel confident about hiring you, as you’re demonstrating that you’re taking their property — and your work — seriously.

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Ready to Buy a Policy? Avoid These 3 Common Mistakes

1. Not admitting to the risks you could face in your business.

It’s tempting to downplay the risks you may face as a business owner, especially if you work in a high-risk industry like construction or plumbing. Insurers generally raise policy prices for high-risk industries, as it’s much more likely an expensive claim could arise as a result of those types of work.

But here’s the thing: The small amount of money you might save in downplaying your risks could end up costing you big-time if you end up having to make a claim.

For example, let’s say you’re a contractor who specializes in home renovations. Your job occasionally requires roofing work, but you decide to not show that on your insurance application because you don’t want to run the risk of it being rejected. You end up finding a great policy and buy it on the spot.

A few months later, a customer complains that the recent roofing job you did was riddled with errors; so many, in fact, that when a bad storm passed through, water leaked into their bedroom and ruined some of the furniture.

Unfortunately, when you submit a claim to your insurance carrier to cover the cost of your customer’s damaged roof and furniture, it’s denied.

The reason for the denial? The work was done on the roof, and your policy doesn’t cover you for roofing work.

While this example was just that — an example — it shows how financially reckless it can be to downplay your risks when shopping for business insurance.

Finding the right policy may not always mean finding the cheapest policy, but that’s OK. The goal is to find a policy that works for your budget without scrimping on protection you may need depending on the type of work you do.

2. Choosing price over coverage.

As a business owner, you’re probably looking for opportunities to save money whenever possible. So what’s the harm in buying the cheapest business insurance policy you can find?

The fact is that the cheapest business insurance policy might not give you the coverage you actually need.

And while you don’t want to overpay for business insurance, you certainly don’t want to underpay, either; that could put you in a tough spot where your policy isn’t covering you for the situations you need.

If you’re interested in the cheapest insurance policy option you can find, make sure you know why that policy is priced the way it is. If it looks like you’re not sacrificing on coverage, great!

But if the policy limit is smaller than others, that may mean you’d have to pay more out-of-pocket if you make a claim that surpasses that limit.

3. Not asking questions.

Listen, we totally get it: Insurance can be confusing.

And given that business insurance is often something you’re required to have, it’s no wonder many business owners just want to get a policy so they can get on with their business.

But it’s worth taking the time to understand what’s in your policy, especially if there’s something you’re not 100% sure about.

That’s why, whether you’re buying online or via an insurance agent, it’s a good idea to ask questions about what your coverage includes. These questions aren’t just great for clearing up any confusion; they also can help you get the answers you need to feel more confident about what you’re actually buying.

Here at Simply Business, we make it easy to ask questions, whether you’re in research mode or in the midst of buying coverage. If you have questions after reading this article, call 844-654-7272 to be connected to a U.S.-based insurance agent.

It’s that simple!

Save More on Your Business Insurance Cost

Shopping for insurance may not be everyone’s idea of a good time (trust us — as an insurance company, we know!).

But if you use the above tips and tricks to try to help save on your business insurance costs, you may find that it’s a lot less painful to find a policy that provides coverage and doesn’t cost you an arm and a leg.

Don’t forget, if you have any additional questions on how to find an insurance policy, you can call one of our licensed insurance agents at 844-654-7272. They are happy to help you find what you’re looking for.

Best of luck!

* Monthly payment calculations (i) do not include initial premium down payment and (ii) may vary by state, insurance provider, and nature of your business. Averages based on January - December 2020 data of 10% of our total policies sold.

Mariah Bliss

Written by

Mariah Bliss

I love writing about the small business experience because I happen to be a small business owner - I've had a freelance copywriting business for over 10 years. In addition to that, I also head up the content strategy here at Simply Business. Reach out if you have a great idea for an article or just want to say hi!

This content is for general, informational purposes only and is not intended to provide legal, tax, accounting, or financial advice. Please obtain expert advice from industry specific professionals who may better understand your business’s needs. Read our full disclaimer

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*Harborway Insurance policies are underwritten by Spinnaker Insurance Company and reinsured by Munich Re, an A+ (Superior) rated reinsurance carrier by A.M. Best. Harborway Insurance is a trade name of Simply Business, Inc., which is a licensed insurance producer in all 50 states and the District of Columbia.

© Copyright 2021 Simply Business. All Rights Reserved. Simply Business, Inc. is a licensed insurance producer in all U.S. States and the District of Columbia. Simply Business has its registered office at Simply Business, 1 Beacon Street, 15th Floor, Boston, MA, 02108. In the state of California, we operate under the name Simply Business Insurance Agency, Inc., License #0M20593. In the state of New York we operate under the name Simply Business Insurance Agency. In the state of Texas we operate under the name, U.S. Simply Business, Inc. For more information, please refer to our Privacy Policy and Terms & Conditions.