The cost of general liability insurance may seem high, but consider the much higher costs of not having it. According to a recent report, 34% of small businesses have reported facing a lawsuit in the past, and nearly two-thirds of these companies say that their businesses were adversely affected by it. Even small and frivolous lawsuits could end up costing you big money.
But, while every business should consider general liability insurance as mandatory, that does not mean that there are not ways of managing the cost of it and making it more affordable. Here are 3 ways to do it:
Get Lots of Quotes
People often make the mistake of thinking that all insurance is the same and that everyone offers the same exact coverages for the same exact prices. But this is not the case. You will be surprised (or even shocked) by the range of prices.
Though make sure that — when you are comparing quotes — that you are comparing comparable quotes. Compare deductibles, policy limits and both inclusions and exclusions. Also, take into account the rating of the insurance company.
While comparing quotes, you may also want to consider adjusting your coverage limits and deductibles. By lowering your policy limits and/or raising your deductibles, you can save lots of money. Just remember that you could end up paying more out of your own pocket later on if you one day have to make a claim.
Bundle Your Policy
As a business owner, you probably need more insurance than just general liability insurance, such as property insurance. Just like when you bundle services from your cable provider — such as TV, phone and Internet — to get better prices on them, if you bundle your insurance policies into what is called a business owner’s policy (BOP), you can save lots of money.
You may also be able to get a discount on your insurance policy if can pay your entire premium in full. There may be other discounts, too. It does not cost a thing to ask.
Manage Your Risks
Some people see the price of an insurance premium as being an arbitrary number that some guy in a suit pulled out of his hat. But the truth is that the price of an insurance premium is the most unarbitrary number there is. It is nothing but cold hard math. The more risk that is involved in operating your business, the higher your insurance premium will be. But, by lowering these risks, you can sometimes reduce your costs. For example, implementing safety standards at your business could reduce your premiums, or doing anything else you can do to reduce the probability of a claim.
Check with your insurance company or agent to find out if there is any changes you can make to your business that will reduce the price of the premiums. Not only can you reduce your insurance cost, but you can also improve the efficiency of your business at the same time.
In conclusion, just because getting general liability insurance is necessary for your business, does not mean that you necessarily have to pay a lot for it. Follow the guidelines listed here and you will save lots of money.