Posted on May 17, 2014
Focusing on cost alone when shopping for commercial insurance can often result in not purchasing the right coverage for business needs. Sacrificing vital insurance protection for a few dollars of savings isn't always prudent considering that underinsuring a company can result in significant out of pocket costs should a lawsuit or claim be filed. Business owners must find the right balance between appropriate coverage and budget so that the company is fully protected and profit margins not compromised.
One way to save on insurance premiums is to fully evaluate your commercial insurance policies at least once a year. Remove redundant or obsolete coverage that is no longer needed due to company changes such as reduced payroll or discontinued operations in one area of the business. Taking control of your business insurance coverage by understanding exactly what is needed to protect your company can help you streamline your insurance policies and still maintain appropriate coverage.
Striking a balance between coverage and pricing may also include assessing deductibles on current policies. When companies increase their deductibles, the insurance premium rates typically go down. You want to make sure that the change in deductibles is affordable so if possible, set aside the deductible amount into a business savings account so it is there if you need it.
Adding safety equipment to business premises can also help with pricing of commercial insurance coverage. Installing smoke alarms, fire extinguishers and security devices can often result in discounts on your policies. Just check with your insurance agent to learn about discounts for safety equipment and employee training.
As a business owner what happens when you are unable to work? In some situations, business operations would have to slow down or come to a complete halt. Purchasing disability insurance becomes a necessity especially for smaller companies that depend on owners or key personnel to stay operational. This type of coverage must not be sacrificed in an attempt to try to cut costs. Rather than trying to replace an entire monthly income, insure just a portion of the income so that should you become disabled, the disability insurance can supplement other sources of income such as a spouse's wages or personal savings.
Another important aspect of maintaining appropriate insurance without purchasing the least expensive policies is that in certain cases, insurance companies offering the lowest rates do not always provide the best customer service or claims handling. Insurers may use teaser rates to get a business in the door, but when it comes to serving the client and managing claims, they fall short. There are many financially stable insurance companies that offer superior customer service and claims handling. While they may not be the cheapest business insurance, they certainly offer the most comprehensive insurance protection with affordable and reasonable rates.
Check with your insurance agent or broker to help you determine what coverage is best for your company. They can assist with finding insurance to meet your particular insurance needs while staying within company budgetary constraints.