10 Tips for Getting Better Business Insurance Rates

Business insurance comes in many forms. You can get general liability insurance to protect your business from liability claims, product liability insurance to specifically protect you against problems with your products, coverage for your buildings and vehicles, or some umbrella policy that protects you against everything. Some insurance providers focus on one specific niche, while others create custom policies for a variety of industries and applications.

But despite the variety and sheer number of options, your business insurance will almost certainly cost you hundreds to thousands of dollars per year—even if you’re running a relatively small operation. Knowing how to reduce those rates is crucial if you want to improve your bottom line.

How to Get Better Business Insurance Rates

These are some of your best strategies for reducing your costs:

1. Get the right type of insurance. First, make sure you’re getting the right types of policies. It’s foolish (and in some cases, illegal) to skimp on insurance entirely, but if you sign up for every type of insurance you come across, you’ll be throwing money out the window. Run a risk analysis and talk to other owners of businesses like yours to learn what’s practically necessary for your line of work, and which types of policies can be avoided or reduced. Select only the coverage that serves you best.
2. Build better business credit. Next, you’ll want to build up your business credit score. Just like with a personal credit score, insurance companies may use this as a secondary indication of risk; the better your financial and credit standing, the less of a risk you’ll pose, and the lower your rates will be.
3. Reduce your risk profile. In most cases, you can reduce your rates by decreasing your risk profile. In some cases, this means establishing practices that reduce the possibility of something happening; for example, you might use regular inspections to reduce the possibility of a product defect, or reduce the total number of miles your company cars are driven.
4. Skip the optional coverage. You’ll have several optional types of coverage available to you, but try not to take on more than you really For example, you won’t need cyber insurance coverage if your business operates offline most of the time.
5. Raise your deductibles (and prepare accordingly). You can probably lower your monthly rates for some types of coverage by raising your deductible (the money you’ll be responsible for paying before insurance coverage kicks in). However, if you choose to use this strategy, you should have emergency funds set aside to pay for those deductibles if and when they’re required.
6. Bundle your policies together. Most insurance providers offer discounts to businesses that use them for all their insurance needs. It’s therefore usually in your best interest to bundle all your business insurance policies together—and it also makes things simpler to organize.
7. Scout for local discounts or trades. Consider looking for a local insurance provider, or a small business in your area that offers business insurance. They may be more flexible on the terms of your insurance, and more willing to do a favor for a fellow small business owner. Moreover, you may be able to arrange a kind of trade with them; if you offer products or services that their business needs, you can give them a discount on your work in exchange for a discount on theirs.
8. Comparison shop. No matter what, get quotes from multiple providers. Each insurance company has a different formula they use to calculate risk, so you may find drastically different quotes between similar providers.
9. In many cases, it’s possible to negotiate your insurance rates. Sometimes, simply asking for a better rate with a strong intention to buy is enough to get you to a lower price threshold. If your business is low-risk and is buying multiple types of coverage, providers will be incentivized to work with you.
10. Stay loyal. Insurance companies want your business. Once you’ve signed up with one provider, it’s a good idea to stick with them for as long as possible; some providers will be willing to reduce your rates over time, especially if you renegotiate those rates after a year of successful coverage.

Balancing Costs and Protection

You can’t eliminate your business insurance costs, nor would you want to; your policies are there to protect you from theft, loss, damage, liability, and dozens of other threats. The trick is to figure out exactly what type of coverage you really need, then find a way to get it as inexpensively as possible. Try to balance your costs with the protection you’ll receive, and keep looking for ways to reduce your total expenses.