Lower Business Insurance Premiums in 5 Steps

To stay competitive as a business owner, you must continually find ways to decrease your overhead costs and improve your profit margins, one of the best ways to decrease costs is to find ways to lower your business insurance premiums. There are a few steps you can take to lower your premiums, keep in mind that you should never pay for more than you need.

Step One: Only Pay for Coverage You Really Need

One of the best ways to save money on your business insurance policy is to pay attention to what you are paying for. In many cases, when you go into business, you buy a generic policy that offers a broad range of coverages. Once you have a better idea of what your business does, and what kinds of risk it faces, you should take the time to review your policy again. Look for liability coverage that does not include your day to day business functions. Often, by eliminating unnecessary coverages, you can significantly reduce your premium. Be careful that you don't become too miserly with your coverage; having enough liability insurance is often worth the cost in the long run.

Step Two: Increase Your Deductible

When you first obtained your policy, you may not have been able to afford a high deductible, but now that you are more established, you can raise your deductible to $1000 or more and save significantly on your business insurance premium. You can have peace of mind if you simply take the deductible amount and put it in a savings account so that you have it if you need it.

Step Three: Improve Your Credit Rating

Insurance companies base your premium in part on your ability to keep paying. Establish or improve your business credit rating. Pay your bills on time. Repair any damage that has been done to your credit rating from unpaid debt. Pay off loans and reduce credit balances to improve your credit score.

Step Four: Shop Around

If it has been a while since you've shopped for business insurance, it's a good idea to do some comparison shopping. Don't expect that you are getting the best rate without obtaining comparisons. You may be able to get more coverage for the same premium cost or the same coverage for less. It's easy to comparison shop online; just be careful about how much information you provide unless you are certain that the company and the website are legitimate.

Step Five: Split or Combine Coverages for Added Savings

In some cases, it may actually be cheaper for you to obtain your business auto policy from one company and your property and casualty insurance from another, particularly if each company specializes in its respective coverage area and can offer you economical advantages because of that specialization. Other companies may offer significant discounts on one type of coverage when you add a second type of coverage to the policy, so it pays to do your homework before making a final decision.