How to Manage the Cost of Insuring Your Small Business

Many owners of small businesses confess that they find the cost of insuring their business very high and yet they can't do without it. Here are some ways through which you can manage the cost of insuring your small business.

Bundle Your Coverage

Many small business owners may find themselves buying business insurance coverage piecemeal due to resource constraints. Another possible reason for this disjointed approach may be that they only pay for coverage once they realize they need it. This piecemeal approach imposes a huge time cost on keeping track of all those multiple policies. It can also increase the total monetary cost of insurance coverage since you are not taking advantage of the economies of scale. Save time and money by bundling all your policies into one policy so that you free up the time that you spend managing (renewing, for example) each policy. You may also find that the monetary cost of a bundled policy is lower than the cost of buying each policy (for instance liability cover and property insurance) separately.

Re-Evaluate Your Deductibles

Some insurance companies levy lower premiums if the client chooses a higher deductible against his or her policy. Use this window of opportunity to raise deductibles on policies where you are almost certain that there is a minimal risk of a problem occurring. For instance, you can raise your car insurance deductible if your car is still new and may not need major repairs soon. Increasing the car insurance deductible is also advisable if you are a very careful driver and you have never been involved in a car accident in which you were the guilty party. In many cases, the insurance company of the guilty person meets the repair costs after an accident. Such selective adjustments of deductibles may help you to reduce the premiums you pay to insure your small business.

Review Your Coverage with Your Agent

Treat the time to renew your policy as a time to review your insurance cover so that you remove items that are no longer relevant to you and add items that need to be covered. For instance, your small business may have owned four cars during the previous year but you sold off three of those cars so you no longer need fleet insurance. You can change that policy to cover the remaining car and that may be cheaper than the fleet cover. You can also add cyber insurance if you have recently added an online store to your business. This annual review will ensure that you have all the cover you need and you have deleted cover that you no longer need.

Use the suggestions above to prevent the cost of insuring your small business from spiraling out of control.