Business insurance is essential to a properly functioning company. It can protect you when accidents occur, as well as give you peace of mind that you’re covered at all times.
If your business insurance rates are rather pricey, you’d probably like to know how to lower them.
The following are some factors that will influence your business insurance rates so you can take action and decrease your costs:
Your property
One type of business coverage you need is property insurance. The more property you own, the higher your insurance will be. Insurance agents will also look at where your business is located and what you’re doing on and with your property. For the former, it matters what type of neighborhood you’re in, and for the latter, the risk of your business activities will be evaluated.
Insurance agents will also assess the physical building you work out of and determine what condition it is in. As an example, your premium will be higher if your roof is in subpar condition and you live in an area that’s prone to inclement weather.
To lower your premium or costs, you may consider switching locations, fixing up your property or outsourcing any risky tasks to another company. You may not be able to change what you do, but you can change where you do it.
Related: 5 Types of Business Insurance and Why You Need Them
Liability
Your liability depends on what your business does and how much of it you’re doing. This means that carpenters, computer programmers and hotels will all have divergent liability classifications on their policies.
Insurance agents will verify how much business you’re doing by looking at your payroll and sales. Higher sales for your company means higher liability, as well. Think about it: if you own a burger joint and you sell more burgers, the number of customers that could potentially get sick from eating your burgers goes up. Your premium will automatically surge, too.
You can prevent your premium from jumping up even higher by putting safety policies in place, hiring experienced workers and training employees on safety standards. That way, you’re not putting your business or your customers at risk.
Workers’ compensation
Workers’ compensation insurance is required in every single state except for Texas. Your premium is based on numerous factors including what your employees do for a living and how much you pay them. Like liability coverage, your insurance agent is going to look at your payroll for this, too.
If you want to lower your costs for this type of insurance, take the right steps to prevent accidents from occurring. Again, you’ll need to thoroughly train your employees and come up with sets of rules they need to follow while they’re on the job.
Make sure your employees are driving safely, as well as wearing protective gear, if necessary. Put managers in place to ensure employees are properly carrying out their responsibilities. Replace any old equipment and property so that the chances of someone getting injured are low. Screen all potential employees by calling their references, looking into any certifications they claim to hold and testing them on safety.
Related: Sign up to receive the StartupNation newsletter!
Key business insurance takeaways
One of the number one factors insurance agents are looking at is how safe your company is in general. The more loss-free you are over a long period of time, the more attractive you are to insurance agents and the companies they represent. If you take the proper precautions, agents will fight for you and offer you lower rates.
It is possible to keep your insurance premiums low. Focus on safety and best practices, and you’ll save money now and in the future.
