As a business owner your objective is naturally profits. Business insurance is a necessity for protecting your investment in your business and protecting your employees. There are four simple ways that you can minimize your business insurance costs without jeopardizing your business or your employee’s safety.
4 Ways To Lower Business Insurance Costs
1) Check the law
Insurance law is dictated by each state and country that you have a physical operation in or do business in. You need to become completely familiar with all mandated insurance requirements for all of the regions that you have a physical operation in or that require insurance for you to do business in.
You can save money by adopting only the coverage that is mandated by law. Most states in the United States do not require that you have insurance that protects the financial investment that you have in your business.
2) Restructue your business
The type of insurance that you need to protect your business from legal action depends on how your business is legally established. A limited liability corporation structure protects you from legal action that could take your personal assets.
Business owners that live in regions that have a high rate of litigation against businesses can reduce their business insurance costs by restructuring their business to the form that is best capable of fending off legal actions.
Changing the structure of businesses that have operations in multiple states can become very involved because business laws are also a state prerogative.
3) Buy what you need
There are a host of business insurance products that cover every possible circumstance that could affect your continuing to do business and loss of business due to natural disasters.
You need to be selective in buying options that you do not need. Flood insurance is a good example. Some regions are prone to flooding regularly while some areas have not had a flood in the last 200 years.
You save your business money by picking the business insurance that is appropriate to your location.
You also need to select coverage that is business appropriate. Many professionals need errors and omissions insurance while a fruit stand operator does not. You should only buy business insurance for equipment that you physically own and need for your operation.
4) Shop for the must haves
Liability, property, business interruption, worker's compensation, and legal liability insurance are all necessary for any business that deals with the public directly or has employees.
These protections prevent your business from suffering a devastating financial loss due to the injury of an employee, damage to another person’s property, or the injury of a client.
All business insurance is like any other product. You pay yourself by shopping for the best coverage at the lowest price. It will take time to compare policies and prices. The money you save can be used to produce profit for your business.
Professional liability insurance.
This type of insurance coverage is also known as errors and omissions (E&O) insurance. It will cover a business against negligence claims resulting from mistakes or failure to perform certain duties.
As long as your business occupies a property (whether as an owner or a tenant), it needs to have property insurance. This will cover all signage, equipment, inventory and furniture in case of a storm, fire or theft. However, "Acts of God" like earthquakes and floods are usually not covered.
Workers’ Compensation Insurance.
Every business should have this insurance added to their policy before hiring begins. The policy will cover disability, medical treatment, and death benefits in case a work staff member is injured or dies as a result of working. Even employees who are not in high-risk jobs could experience injuries like slipping and falling which will inevitably come down to whether or not the business has workmen compensation.
Product liability insurance.
If you manufacture products for the wholesale or retail markets, you need a product liability insurance to protect your business in case of a claim. Even though you have stringent policies in place to make sure your products are safe, some companies will still find themselves in a lawsuit because of product quality or effects.
If you use vehicles for your day to day business activities, then you should have a comprehensive business motor insurance to protect the business against liability in case of an accident. All companies should have at least a third party insurance coverage. However, if your employees are using their own vehicles for your business activities, then they are covered by their own personal insurance.
Business interruption insurance.
Sometimes a catastrophe or disastrous event can slow down the operations of a company. A business interruption insurance can cover the loss of income suffered. This type of insurance is usually necessary for brick and mortar business models such as retail stores.