How to Get Cheap Business Insurance – Forbes Advisor

How to Get Cheap Business Insurance – Forbes Advisor

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More than 32.5 million small businesses in the U.S. employ nearly 47% of the private workforce, according to the latest data from the U.S. Small Business Administration of Advocacy. This includes almost every type of business you can imagine. Everything from restaurants, hair salons, gardeners, lawyers, information technology services, tutoring and dog sitters.

But if there’s one common denominator among this vast group of small business owners, it might be this: They need the best small business insurance that fits the specific risks that come with their profession.

Here’s how to find cheap business insurance.

Find out what types of coverage your business needs

Before you start shopping for small business insurance, it’s important to understand what types of coverage are available. One of the best ways to get started is to purchase a business owners policy (BOP). BOP combines three basic types of business:

  • General liability insurance. This covers your business against liability claims such as accidental injuries and property damage. General liability insurance also covers other types of claims, such as copyright infringement, advertising damage and reputational damage.
  • Commercial property insurance. This covers your business’s physical assets in the event of problems such as theft and fire damage, such as your building and office equipment. Commercial property insurance is also called business property insurance.
  • Business interruption insurance. This replaces lost business income if you are unable to open your business due to an issue covered by your policy (such as a fire). Business interruption insurance is also called business income insurance.

You can customize your policy with other types of small business insurance. It’s a good idea to speak with an independent agent who can help you identify the types of coverage that fit your business’s specific needs.

For example, if you have employees, you will most likely need to purchase workers’ compensation insurance. And if you drive the vehicle for business purposes, you will need to have commercial car insurance.

Shop for cheap business insurance

Once you understand what types of coverage you’ll need for your small business, you’ll want to compare business insurance quotes from several insurance companies. This is because the price for similar cover can vary between insurers.

You can get free business insurance quotes:

  • Online. Most commercial insurance companies offer free quotes online. You can visit the websites of several insurers to get quotes. Or you can use a quote comparison website that provides quotes from multiple companies at once.
  • By phone or in person. You can talk to a local insurance agent who can help you find the best coverage and rates for your small business. It’s wise to talk to an independent agent who can get quotes from multiple companies. A “captive” agent works for one insurance company and cannot provide you with quotes from multiple insurers.

What information do I need to get a business insurance quote?

To get an accurate business insurance quote, you’ll want to gather some basic information, such as:

  • Industry type
  • The location of the business, including property details such as the size and age of the building
  • Business name
  • Business partners
  • Information about the owner, including the number of years in the industry
  • Details of business operations
  • How much your business will earn in revenue
  • Number of employees
  • Annual salary
  • Subcontractor costs
  • Business equipment including tools, materials and computers
  • Insurance history and previous claims

Pack your business insurance

You may need several types of small business insurance to cover risks specific to your industry. One of the best ways to get cheap business insurance is to buy multiple policies from the same insurance company.

One way to do this is by purchasing a business owners policy (BOP). BOP brings together key types of insurance: general liability insurance, commercial property insurance and business interruption insurance.

A BOP is a good start for most small businesses, but it doesn’t cover everything. You can purchase other types of coverage to meet your business needs. For example, you can add workers’ compensation to cover employee injuries or commercial auto insurance for your company car.

Manage your company’s risks

You may be able to find cheap business insurance by taking steps to manage the common risks that affect your business. Here are some examples of actions you can take.

  • Install security alarm and fire protection systems. If you install devices such as burglar alarms, fire alarms and sprinkler systems, you can get a discount on your commercial property insurance.
  • Create a safe workspace. Taking steps to eliminate hazards in your workplace can help reduce the likelihood of general liability and workers’ comp claims. For example, keep your sidewalks free of clutter, clean up spills immediately, and train your employees to properly operate equipment.
  • Create a job description for each position that clearly defines performance expectations.
  • Develop an employee handbook. Detail your company’s workplace practices, policies and best practices. This should include attendance, discipline and grievance expectations and a discretionary employment statement and equal opportunity statement.
  • Create a record keeping system to document employee issues and other types of incidents when they occur, including what your company has done to address and resolve those issues.
  • Reduce your exposure to cyber threats. You can take steps to help prevent some of the most common cyber threats small businesses face.

Review your business risks every year

As your business grows, you may take on additional risks. For example, you can buy new equipment or introduce new duties for your employees.

It’s a good idea to review your business risks annually and talk to your insurance agent about how changes in your business may affect your coverage. You can usually add more coverage if you need it. Without sufficient business insurance, your company could end up paying accounts receivable out of pocket.

How much does small business insurance cost?

The median cost of a business owners policy (BOP) is $636 per year, according to Insureon. BOP combines general liability insurance, commercial property insurance and business interruption insurance.

Your small business insurance costs will depend on several factors, including:

  • Your type of business
  • Long-term experience of your business
  • Your business location
  • The size, location and condition of your building
  • Number of employees
  • Salary
  • Business assets
  • Policy details such as coverage limits and deductibles
  • History of your insurance claims

Examples of general liability insurance costs by profession

Here’s a look at how the average cost of general liability insurance varies by profession.

Simple business insurance

Compare free quotes from top insurers at SimplyBusiness. Get a policy within 10 minutes.

Frequently asked questions about how to get cheap business insurance

What does small business insurance cover?

What small business insurance covers depends on what types of small business insurance you buy. A business owners policy (BOP) is a good place to start. BOP combines three basic types of coverage: general liability insurance, commercial property insurance, and business interruption insurance.

BOP covers your business against issues such as lawsuits, damage to business property, and lost income if you are unable to open your business due to an issue covered by your policy (such as a fire).

You can tailor your policy to cover other issues that affect your business. For example, if your company handles sensitive data such as your client’s contact information, you can purchase cyber liability insurance to cover issues such as legal fees and data recovery costs.

What is not covered by small business insurance?

Small business insurance does not cover certain types of natural disasters, such as flood damage. If you want flood coverage, you will need to purchase a separate commercial flood policy.

Your small business insurance also excludes coverage for other types of issues, such as intentional or fraudulent acts.

Do I really need business insurance?

Without business insurance, you will have to pay out of pocket for claims against your business or replace damaged business property. Many business owners purchase a business owner’s policy to cover a range of issues, such as lawsuits against your company, theft and damage to business property, and compensation for lost income.

Depending on your business, you may need to purchase other types of coverage. For example, if you have employees, your state will most likely require workers’ compensation insurance. And if you or your employees use the vehicle for business purposes, you’ll need commercial auto insurance.


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