What’s the Best Way to Save Money on Small Business Insurance?

You have two routes for saving money on small business insurance. The first method is to purchase a Business Owner’s Policy (BOP), which bundles General Liability and Property Insurance together. If you’re eligible for this package, you’ll pay less for the bundle than you would if you bought the policies individually. The second way to cut costs is to manage your risks. Putting safety procedures in place can prevent the accidents that result in expensive claims (and subsequent premium increases).

How to Save Money on Small Business Insurance: Details

Small-business owners are no strangers to making the most of a shoestring budget. But let’s find out how you can give yourself some breathing room. Read on to learn more details about…

  • How a BOP reduces your insurance spending.
  • How to customize your BOP.
  • How a risk management plan can keep your insurance rates down.

So How Does a BOP Reduce My Premiums, Anyway?

If you’re a small-business owner in a low-risk industry, you may qualify for a Business Owner’s Policy, a cost-effective and convenient insurance bundle. A BOP allows you to pay a discounted annual premium for both your General Liability and Property Insurance.

A basic BOP covers the same events that trigger your General Liability and Property Insurance coverage. General Liability protects your business from lawsuits brought by third parties (i.e., people who aren’t employed by your business). For example, GL covers the following types of claims:

  • Premises liability. If a customer slips and falls in your shop, you could be sued for their medical expenses. General Liability can cover your lawyer fees and settlement or judgment expenses.
  • Property damage. If your business damages someone else’s property, your GL policy can pay for replacement costs.
  • Advertising injuries. If your business is sued for libel, slander, or copyright infringement, your policy can cover your legal expenses.

Property Insurance can reimburse your business when its commercial office space and equipment is lost or damaged because of…

  • Fire.
  • Vandalism.
  • Wind.
  • Theft.

Your BOP may also include Business Interruption Insurance, a coverage that helps you get back on your feet when a covered claim brings your business to a standstill. Say, for example, a merciless fire ravages your store. Your inventory is reduced to smoldering ash, and it’s going to take you a while to rebuild and repair your shop. Business Interruption Insurance can compensate you for lost income so you can still make payroll.

Making the Most of Your BOP

You can customize your BOP by adding other policies (e.g., Commercial Auto Insurance or Cyber Liability Insurance) and endorsements. Think of an “endorsement” as a mini insurance policy. They are typically designed to cover one specific risk, which makes them relatively inexpensive. Small-business owners often use endorsements to fill gaps in their coverage.

The types of endorsements you might add to a Business Owner’s Policy depend on your industry. Some examples of common endorsements are…

  • Flood coverage.
  • Food spoilage.
  • Debris removal.
  • Pollutant cleanup.

Contact an insureon representative for help customizing your BOP.

How Mitigating Your Risks Can Keep Insurance Costs Low

Whether or not you qualify for a BOP, you can always save money on your commercial insurance by developing a risk management plan. When you sit down to write a risk management plan, ask yourself…

  • What could go wrong?
  • How much could I lose if that happens?
  • How can I reduce the chance of it happening?

The first question gets you thinking about your exposures. For example, let’s say you get a lot of foot traffic in your store. This can lead to a couple risks:

  • There are more chances for people to get hurt on your property, which can result in expensive lawsuits.
  • There are more opportunities for theft, which can lead to financial losses.

To address these risks, you might…

  • Put runoff mats at the entrances to your shop to reduce slip and fall injuries.
  • Limit public access to certain areas of your store (especially cluttered areas, which can cause trips).
  • Install secure handrails so visitors don’t fall or trip on steps.
  • Install security cameras and alarms to protect your inventory.

Your exposure to some risks, such as copyright infringement claims, may be less obvious to address. However, you can mitigate these types of lawsuits by getting familiar with the basics copyright law. You can then use your knowledge to train employees using social media, developing content, or creating advertisements.

Ready to start budgeting for insurance? Submit a free online application, and our agents will compile competitive rates for you to choose from.