“Cheap” Insurance vs “Good” Insurance
The distinction between a “cheap deal” and a “good deal” is subtle: they may very well have the same cost at face value, but the extent of coverage provided by a “good” deal will be much better. Cheap deals are usually so because they offer very thin protection, whereas good deals get you the cover you need without a skyrocketing cost.
Insurance is not only about the price, but what you actually get for that price. What’s more, you don’t have to sacrifice the extent of your cover in order to reduce the premium. There are a few tips and tricks that you can bear in mind to keep the cost of your insurance premium down, while still getting the coverage your business needs.
Avoid Over and Under Insuring
You need to protect every vulnerability in your business, but, this cover needs to be cost effective, too. It’s amazing how many business owners over or under insure, either unwittingly or intentionally, and it’s essential that you avoid it.
Over insuring means that you could be paying for cover that you don’t actually need, which is a waste of money that could be better spent elsewhere. For example, a pub landlord who leases his business from a brewery may not need to take out buildings or contents coverage, as there’s a chance that the brewery may already have this insurance in place.
Under insuring—often done intentionally to lower costs—can leave your business defenceless in the face of a threat, which could end up costing your business thousands in the long run. A “what-are-the-chances” attitude is always a dangerous attitude to have.
Get a Tailored Package
Once you’ve made sure that you’re only taking out the types of cover that are relevant to your business, look closer at each policy and see if it can be fine-tuned to your business’s specific circumstances. For example, have you considered all the optional extensions that could be added to your contents insurance policy? Just to name a few:
- Stock insurance
- Cash on premises
- Tools and equipment
- A flood or fire
- Accidental damage
- Theft committed by employees
Reduce Your Risk
If you present a high level of risk in your insurer’s eyes, they will probably quote you a relatively high premium as a result. The good news is that it works both ways, and if you lower the level of risk you present, you can correspondingly lower your insurance premium. There are a number of ways you can lower your risk, including:
- Installing new locks on doors and windows
- Getting new alarm systems fitted
- Enforcing proper risk management in the workplace
- Nominating employees as first aiders
- Displaying visible health and safety procedures
Reduce Cost without Sacrificing Coverage
Having proper business insurance in place is essential for any startup or small business, and it doesn’t have to be as expensive as you may think. When it comes to putting insurance in place for your business, take your time—make sure you explore all the options to make sure you’re getting comprehensive coverage that won’t leave your business at risk. Experiment with some of the above cost-reducing techniques and see if you can lower the price of your insurance premium without sacrificing the extent of your coverage.
Author: Hannah Corbett is a writer for Make It Cheaper: the business saving experts, and a startup enthusiast. When she’s not producing content, she’s trawling the internet for the latest in the startup and SME world. Follow Hannah on Twitter for more small business tips and tricks, or connect with her on Google+.