How to Find Cheap Small Business Insurance in 2024

How to Find Cheap Small Business Insurance
How to Find Cheap Small Business Insurance

Insurance is important for every small business. Since small businesses encounter risks on a daily basis, not having a policy means more risks.

Some small business owners and accounting firms in the United States can't afford insurance coverage since their businesses are still trying to find their feet. But that doesn't mean they should just leave their business unprotected. There are other ways, such as buying a cheap insurance policy.

In the United States, there are over 33.1 million small businesses. These businesses provide jobs for 61.7 million Americans, which is about 46.4% of all private sector workers.

A survey by Next Insurance found that 29% of small businesses don't have any business insurance. Also, more than half (53%) of small business owners said they don't know what type of insurance their company needs, making it their main challenge in getting insurance.

Finding cheap small business insurance is not as difficult as you think. You must be careful so that you won't buy the policy you don't need, and leave the important ones that your business needs.

This is why our team of insurance experts came up with this article, to teach you the strategies to find affordable small business insurance. Discover how to save money while still safeguarding your business, whether through comparing options or combining insurance policies.

How Much Does Business Insurance Cost?

Let's take a quick look at the monthly costs of popular business insurance policies based on our customer data:
  • General liability: $42
  • Workers compensation: $70
  • Business interruption insurance: $40
  • Errors & omissions: $61
  • Workers' compensation: $45

How to Find Affordable Small Business Insurance

When you want to buy insurance for your small business, going for the cheapest business policy isn't always the smartest choice. Picking business insurance might not cover your business if you get sued.

It's essential to figure out your risks and choose the right policy to avoid higher costs in the future. The good news is, there are ways to reduce costs while keeping your business secure.

1. Comparison shop

Rates and services vary from one insurer to another, so it's crucial to shop for the right policy that fits your business. When comparing policies, remember not to focus solely on premiums.

Each policy has different terms for what it covers and what it doesn't. These details can clarify why one policy costs much less or more than another.

Before you decide, have a chat with an insurance agent to ensure the policy gives your company the protection it needs. The agent can assist you in comparing quotes, understanding coverage details, and finding an affordable plan that keeps your business safe.

2. Bundle your policies

Many insurance companies offer a discount if you buy multiple policies. Combining policies can save you money.

As an example, it's typical to combine General Liability Insurance with Commercial Property Insurance in a Business Owner's Policy (BOP).

Usually, it costs less to purchase a Business Owner's Policy (BOP) than to purchase Commercial Property and General Liability Insurance individually.

Although BOPs aren't offered to everyone (most providers limit them to small and low-risk businesses), many small tech firms can buy one. If you're unsure about which combination of policies is best for your business, consult an insurance agent for guidance.

3. Choose a higher deductible

Some business insurance policies don't have a deductible. However, if yours does, increasing it can reduce the amount you pay for your premium.

Always choose a deductible that you can manage to pay comfortably. Opting for cheap business insurance with a high deductible won't be useful if you can't afford to cover that deductible right first.

4. Choose lower limits

Insurance policies with higher coverage limits are more expensive but offer better protection. The key is to choose the limits that match your level of business risk. For instance, your commercial property insurance limits should equal the value of the business property you want to protect.

Do you know that many policies have two limits? Yes they do. The limits are per-occurrence and aggregate limit. The per-occurrence limit is the most your insurer will pay for one claim, and the aggregate limit is the most they will pay over the policy period, usually a year.

5. Manage your risks

Sadly, filing claims on your insurance can lead to an increase in your premiums. 

Here's why: If insurance companies think your business is riskier, they might decide to make you pay more.

Fortunately, there are steps you can take to reduce your chances of claims. If you handle everyday risks well, it can significantly lower the likelihood of having to use your insurance. For instance, when it's rainy, make sure to mop the floors to reduce the chances of people slipping and getting injured. 

You have various ways to lower risks, like putting up security cameras or getting rid of things that can cause tripping. You can also handle professional liability risks by communicating well with your clients.

What Determines the Cost of Small Business Insurance?

The cost of business insurance depends on:
  • The type of business you have and the risks involved.
  • How many people work for you (employees).
  • The coverage limits and deductibles you choose.
  • Where your business is located.
  • How much money your business makes.
  • What kind of business it is (like a sole proprietorship or an LLC).

Conclusion: How to Find Cheap Small Business Insurance

Small business owners already have plenty to deal with. The one thing you don't want to stress about is getting business insurance. The better you understand what makes your insurance cost more, the more you can do to lower the risk and pay less for it.

The amount a company pays can be different depending on where it is (location) and what kind of business it does (industry). When a company in the same industry pays more or less money, there might be complicated reasons for it.

Remember, insurance doesn't come in a one-size-fits-all package. It's important to build a good relationship with your small business insurance agent through clear communication.

FAQs on How to find Cheap Small Business Insurance

Here are some frequently asked questions (FAQs) about finding affordable small business insurance:
  • What factors affect the cost of small business insurance?
Several factors can influence the cost, including your business type, location, coverage needs, and claims history.
  • How can I find cheap small business insurance?
To find affordable insurance, you should shop around, compare quotes from different providers, consider bundling policies, and assess your coverage needs.
  • Is it essential to work with an insurance agent?
While you can purchase insurance directly from providers, working with an experienced insurance agent can help you find the best coverage options and discounts.
  • What types of small business insurance are typically more cost-effective?
Some policies, like a Business Owner's Policy (BOP), can offer bundled coverage at a lower cost compared to individual policies.
  • Can I lower insurance costs by implementing safety measures in my business?
Yes, taking steps to improve safety and reduce risks in your business can often lead to lower insurance premiums.
  • Do I need to reassess my insurance regularly?
Yes, it's a good practice to review your insurance needs annually, as your business may change, and you may find opportunities to adjust your coverage and reduce costs.
  • What is the importance of clear communication with your insurance provider?
Open and honest communication with your insurance provider can help you avoid misunderstandings, ensure you have the right coverage, and potentially find discounts or savings.
  • Are there any government programs or resources to help small businesses with insurance costs?
Depending on your location and the nature of your business, there may be government programs or incentives to help reduce insurance costs. Check with local authorities or business associations for information.
  • Is it wise to sacrifice coverage to reduce costs?
It's generally not recommended to compromise coverage for cost savings, as inadequate insurance can leave your business vulnerable. Instead, focus on finding affordable policies that meet your needs.
  • Where can I get quotes for small business insurance?
You can obtain quotes from insurance companies, insurance comparison websites, or by contacting a licensed insurance agent.
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