As a small-business owner, you know every nickel and dime counts. You’ve probably got your money laid out neatly for your day-to-day expenses, but where does insurance fit into your budget?
Professional Liability Insurance is coverage you need if your business commits an error or faces a frivolous lawsuit. But will it break the bank? And how is the cost of Professional Liability coverage determined, anyway?
In short, the specifics of your business (e.g., size, type, and location) ultimately determine the cost of your policy. Every insurance provider will assess this information differently. But if dollars are tight, rest assured, there are ways you can save on Professional Liability Insurance costs. Here are six tips to help keep your insurance costs low and save some green.
1. Keep Your Professional Liability Claims History Clean
The fewer claims you make on your policy, the lower your insurance rates. Here's a way of thinking about it: every claim you make on your policy has the potential to increase your rates. To keep a clean record and keep your insurance rates low, implement strategies to reduce your risk of professional liability lawsuits.
2. Choose a Higher Deductible
Generally, the lower your deductible is, the higher your premium, and vice versa. Remember what those are?
- Your deductible is the amount you pay out of pocket before your insurance benefits kick in.
- Your premium is the amount your insurance provider charges for coverage.
So why would you want to choose a higher deductible? Basically, by agreeing to pay a larger amount upfront if you file a claim, your monthly or annual premium payments will be smaller. It also acts as an incentive to reduce your risk of a lawsuit in the first place.
3. Compare Professional Liability Insurance Quotes
You’re probably already a savvy buyer who always looks for the best deal. Why pay more when you can get the same thing or better elsewhere?
Take the same approach when shopping for insurance. As we mentioned earlier, each insurance provider looks at your small business’s risk profile differently, so premiums will vary. But remember, price shouldn't be the only deciding factor – you want to make sure you're getting adequate coverage, too. Pro tip: to save time, work with an agency that gives you free online quotes from top-rated insurance providers.
4. Talk with Your Insurance Agent
Your insurance agent is one of your best resources. They know insurance. It’s their job. So put them to work! Talk to an agent familiar with your industry (hint: Insureon’s agents) about customizing your coverage. That way you know you're not paying for bells and whistles you don't really need.
5. Bundle Your Insurance Policies
Small-business owners who purchase several insurance policies from a single insurance provider may be eligible for discounts. For instance, you can purchase a Business Owner’s Policy, which bundles together General Liability Insurance and Property Insurance at a reduced yearly rate.
Professional Liability Insurance isn’t typically included in a BOP, but bundling your other policies helps trim overall insurance spending. Having said that, some industries can get a professional bundle, which combines a BOP with Errors & Omissions Insurance. Usually, this is only available to very low-risk businesses.
6. Don't Start and Stop Your Professional Liability Coverages
Often, Professional Liability policies operate on a claims-made basis, which means incidents and claims that happen when your policy isn't active are not covered. Starting and stopping your coverage can be a red flag to insurance providers, which drives up your rates. To keeps rates lower, do your homework, pick a policy that best fits your needs, and keep your coverage in force.