Business owners policies offer affordable coverages for small businesses, but the premiums for these policies still vary. While Vermont businesses can’t do much about their industry, size, claims history or other factors that influence premiums, there are a few steps that could help save on a business owners policy.
What can small businesses in Vermont do to save on their business owners policy?
Don’t sacrifice essential coverages
Before looking at what can be done to lower business owners policy premiums, it’s important to consider what not to do. Essential coverages shouldn’t be cut in order to save on premiums. Saving a little on insurance by eliminating a coverage can prove extremely costly if something happens.
Now, there are several things that small businesses can do to reduce what they pay.
Increase deductibles to save on premiums
Increasing deductibles can be a reasonable way to modify (but not actually cancel) coveages so that premiums decrease.
A deductible is generally the amount paid by the policyholder before a policy begins paying for a covered claim. For example, consider a $20,000 claim on a policy that has a $1,000 lawsuit. The policyholder would likely pay the first $1,000, and the insurance company the next $19,000.
Raising a deductible shifts some risk from the insurance company to the policyholder, especially for smaller claims. In exchange, the insurance company will often decrease the premiums by a not-insignificant amount.
While this does reduce the amount of protection afforded by a business owners policy, the added risk assumed is a finite amount. It’s not a potentially unlimited amount, as can happen with canceling a coverage or lowering a coverage limit.
Take loss-prevention steps
One of the main protections that most business owners policies provide is coverage for damaged or lost property. If a business takes steps to reduce the risk of theft, then the insurer may be willing to lower commercial property premiums.
Another noteworthy coverage is general liability coverage, which may pay for injuries that others sustain during accidents. Thus, reducing the risk of injury may net a savings on general liability coverage
Exactly what loss-prevention steps qualify for discounts depends on the insurer, but they may be actions such as:
- Installing a monitored security system for the business’s location
- Only working with vendors who have their own insurance policies
- Developing standard safety protocols that are to be followed
An insurance agent specializing in business owners policies will be able to check what steps a particular insurance company would offer discounts for.
Compare policies with an independent insurance agent
One of the most effective ways to save on anything is to shop around, and this is true for insurance too. It’s also easy to do with the aid of a knowledgeable independent insurance agent.
An independent agent isn’t linked to any one insurance company, so they can check quotes from several different insurers. They can then review any coverage differences between the policies, and how much each policy would cost.