How to Save Money on Business Insurance

In Canada nearly half of the available jobs (48.3%) are created by small and medium-sized businesses [1] yet also in Canada:

• 30% of businesses fail before their 5th anniversary [2] • 7,000 businesses go bankrupt every year [2]

If you’re a business owner you’re likely well aware of stats like these and worrying about them is enough to stress out even the calmest of cucumbers.

Finding ways to reduce your commercial insurance costs is one of the best ways to ease the pressure and increase your chances of success. One of the cost-saving options may be in regards to your business insurance.

Are you overpaying for business insurance? Let’s find out.

HOW MUCH DOES BUSINESS INSURANCE COST?

The short answer is, it depends. On what?

1. Coverage needs
Larger businesses that require more coverage will spend more.

2. Industry risk
Certain industries have higher inherent risks than other industries.

3. Claim potential
How much is at stake? Human (employee or customer injury), property (building, inventory, equipment) or digital (data breach, intellectual property) are all factors.

* Important to note that your annual sales projections/results are typically required by your insurer when determining your business insurance premium. This information aids in determining the size of the business in terms of volume of business annually and is considered when establishing the proper liability rates or CGL (Commercial General Liability). Minimum liability rates apply to all commercial policies.

HOW CAN YOU REDUCE YOUR BUSINESS INSURANCE COSTS?

1. GAIN EXPERIENCE
The more experience you have within your industry the less risk you will be seen to have in the eyes of an insurance provider.

Some providers won’t even write a policy for any new business with less than 5 years’ experience in that industry without approval.

2. REDUCE LIABILITY RISK TO BUILDING
Many factors go into evaluating the risk level of a building.

The materials used within the building, hydrant protection and the use of building space are 3 of the main examples that can have an impact on what you pay in business insurance.

Also, keep in mind that your neighbours may have an impact here too. The risk level of any adjoining businesses that are within the same building or neighbouring in a plaza can have a direct impact on what you’re paying for insurance.

3. ENHANCE SECURITY
What you pay, and in some cases, if an insurance provider can even cover you, also depends on what type of security you have for your business.

– Do you have a monitored alarm system?

– Is there physical security in place on your doors and windows?

– What does your fire suppression system look like?

– How secure are your electronic devices, including your businesses Wifi?

The more secure you can make your business the less you’ll pay in insurance (and the better you’ll sleep at night).

4. INCREASE YOUR DEDUCTIBLE
One way to reduce your commercial insurance premium payments is by raising your deductible. Just make sure what you choose suits your businesses revenue and risk tolerance.

5. REVIEW ANNUALLY
It’s important to make sure you’re only paying for what you need. If your business has changed over the past year (volume of sales, location, size etc.,) make sure what you’re paying for business insurance reflects those changes accurately.

When in doubt, reach out to your insurance provider with any questions or concerns. If your provider is a good one, they will be happy to work with you to make sure you’re covered for everything you need and nothing you don’t. They may also have specific tips on how your unique business can reduce its risk.

Erie Mutual Insurance proudly serves the commercial insurance, farm insurance, home insurance and auto insurance needs of members throughout Southern Ontario including Haldimand, Niagara and Hamilton.

Please don’t hesitate to contact us with any questions you may have about this or any other topic related to your insurance.

SOURCES