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How to Get Cheap Business Insurance

Insurance Ranked - Updated January 12, 2023
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How to Get Cheap Business Insurance

Protecting your company against liability risks will cost money. You have to choose the coverage that fits your company's needs and budget. Expensive coverage can run counter to what insurance is meant to do: save your business money in the event of a claim.

Follow these five basic steps to learn how to get cheap business insurance that sufficiently protects you:

1. Bundle policies for broader coverage at a lower cost

Insurance companies constantly fight their competitors for customers. As such, they will often work with prospective customers to get their business. Insurance companies can offer bundled policies at a discount. For example, small businesses might be able to purchase a less-expensive bundle that contains general liability and commercial property insurance.

2. Shop around to find the best business insurance and reduce costs

You do not have to choose the first insurance company you find in a quick online search. Numerous companies offer plenty of coverage options. If you need help or do not have time to shop for business insurance, then you can get in touch with an insurance agent or broker. Choose an unbiased one that can find you the most affordable rates for the coverage you want. They should also help you purchase the right policy that fulfills your company's insurance requirements.

3. Customize your business insurance policies to match your needs

If your company does not work with vehicles, then it probably does not need commercial auto insurance. You should determine what risks threaten your company and find a policy or combination of policies that address those risks. Partnering with an insurance agent or broker can help you avoid paying for coverage that does not apply to your company.

4. Prepay your annual premium

A prepaid annual premium will provide coverage for a year. It can also provide policyholders with a discounted price.

5. Limit claims by managing your risks

If your company takes steps to reduce its risks, then its insurance coverage could become more affordable. Insurance issuers can assess your risks and adjust rates based on whether or not they think they will have to pay out on a claim. The fewer risks you present, the lower your premium (possibly). Again, you should speak with an insurance agent or broker for more information. They can suggest ways your company can manage its risks. For instance, companies can:

Install security alarms and fire suppression systems

Taking action to prevent break-ins and fires can potentially appeal to insurance companies when they deduce the chances of those events occurring is low.

Communicate clearly with clients and customers

Transparent and frequent communication can reduce a company's risk of errors and omissions in insurance lawsuits. When all parties understand what is expected of a business relationship, the chances of litigation could drop.

Create a safe workplace

Regardless of your company's industry, keeping people safe is paramount. Safety hazards should be eliminated to reduce workplace injuries and subsequent claims and lawsuits.

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How do you know if you're paying too much for business insurance?

The two most common signs you are paying too much for business insurance are you have too much coverage or the wrong type. You could also be paying too much if you have:

  • deductibles that seem too low.
  • incorrect policy information.
  • policies with multiple insurance companies.

How much does small business insurance cost?

Rates vary based on several factors that include industry, location, and coverage types.

Liability Insurance Cost

Liability insurance can cost between $24 and $300 per month.

Commercial Auto Insurance Cost

Commercial auto insurance can cost between $12 to $140 per month.

Commercial Property Insurance Cost and Others

Commercial property insurance and other miscellaneous policies can cost between $15 to $100 per month.

How Much Does a $1 Million Dollar Business Insurance Policy Cost?

You can expect to pay between $500 to $1,200 per year for a $1 million business insurance policy. As previously stated, the cost depends on various factors.

How Much is General Liability Insurance Cost for Small Business?

General liability insurance for small businesses can cost anywhere from $60 to $170 per month.

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What Kind of Insurance Do I Need for My Business?

Commercial General Liability Insurance

Commercial general liability insurance can help you cover the legal costs of personal injury lawsuits, victim compensation, property damage reimbursements, and advertising injury and copyright infringement litigation.

Commercial Property Insurance

Commercial property insurance covers tangible asset losses due to fire, malfunctions, and theft. Tangible assets typically include commercial buildings, signs, equipment, inventory, and files.

Product Liability Insurance

If your business sells products, then it should have product liability insurance. This type of coverage handles the costs of litigation and compensation for injury and property damage claims stemming from the use of your product.

Directors and Officers Insurance (D&O Insurance)

This type of insurance covers your company's directors and officers if claims are filed accusing them of transgressions like fraud and poor, non-criminal financial decisions.

Commercial Auto Insurance

Commercial auto insurance covers vehicles used for business purposes. These policies help pay for legal costs, personal injury compensation, medical bills, and vehicle repairs.

Commercial auto insurance cost factors

Industry and Profession

How your company uses its vehicles factors into insurance rates. A higher-risk industry like hazardous waste transportation will usually generate higher costs than floral delivery.

Location

Weather and traffic can affect your commercial auto insurance costs. If your business operates anywhere that could raise the chances of vehicle damage and collisions, then your company can expect to pay more.

Vehicles

Your company's vehicles help dictate how much it must pay for commercial auto insurance. For example, trucking companies generally pay more for commercial auto insurance.

Driving history

Employees with poor driving records who drive your company's vehicles can raise your rates because their histories suggest they will cause incidents.

Coverage needs

The more coverage you need, the more you will have to pay.

How to get the cheapest commercial auto insurance

Maintain a clean driving record

Employees who do not pose much of a risk when they get behind the wheel in a company vehicle on work time will probably not cause traffic incidents, meaning insurance companies might pay out less for that company's policy.

Adjust your coverage limits and deductibles

Raising and lowering your coverage limits to align with your company's requirements can save you money.

Discounts

Bundle, paid in full, and other discounts can make insurance rates more appealing.

Business Interruption Insurance

Business interruption insurance compensates companies for damages originating from business closure. This insurance covers lost profits, operational costs, wages, taxes, and more.

Liquor Liability Insurance

Businesses that make, sell, or serve alcoholic beverages should have liquor liability insurance. This coverage helps businesses when they are held liable for injuries an inebriated customer inflicted or suffered.

Ocean & Inland Marine Insurance

This type of insurance covers lost or damaged cargo that is delivered by sea.

Business Owner's Policy: BOP Insurance

BOP is a bundle of various insurances to provide broad coverage. BOP can be less expensive than individual policies.

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Can Self-Employed Professionals Get Business Insurance?

Self-employed professionals can purchase business insurance to cover equipment failure, lost income, and lawsuits.

What Coverage Shouldn't Be Missing in Insurance for Internet Businesses?

In today's digital world, cyber liability insurance is essential to protect against claims in the event of data breaches and other cyber attacks. Bundling this type of insurance with commercial property, professional liability, public liability, and general liability insurances can help many businesses.

Do Gun Shops and Shooting Ranges Pay More for Business Insurance?

Given the inherent threat posed by forearms, gun shops and shooting ranges will probably pay more for business insurance if they can find a carrier that offers them coverage.

Is Renter's Insurance a Business Insurance?

Business renters insurance coverage is the same as business insurance.

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Is Short-Term Business Insurance More Expensive Than Standard Business Insurance?

Short-term business insurance costs more because the company must immediately pay for the policy.

Business Auto Insurance vs. Personal Auto Insurance

Business auto insurance is for companies that own vehicles for business use. Personal auto insurance covers privately-owned vehicles that are used for personal use.

What Does Commercial Auto Insurance Cover?

Different Types of Vehicles

Commercial auto insurance can cover trucks, cars, and certain types of motorized equipment.

Bodily Injury Liability

Medical and legal expenses are covered under commercial auto insurance policies.

Property Damage Liability

Commercial auto insurance covers the physical damage caused by vehicles you use for business.

Physical Damage

Physical damage insurance can help you cover the costs of vehicle repair when the vehicle sustains damage from collisions, vandalism, fire, and any other instance of physical harm.

Personal Injury Protection

This coverage takes care of the medical costs and income loss of the occupants of your business vehicle if they experience an incident.

Uninsured Motorist / Underinsured Motorist

This coverage pays for damages suffered by the occupants of your business vehicle if the incident is caused by an uninsured or underinsured driver.

Additional Coverage

Additional coverage can defray funeral, roadside assistance, rental, and towing expenses.

Damages Exceeding Policy Limits

The policyholder will usually have to pay out-of-pocket for any damages that exceed the policy's limits.

Factors that affect your business insurance costs

Profession

Your company's industry plays a significant role in determining your business insurance costs. High-risk professions will yield higher business insurance costs. For example, a construction firm can expect to pay more than a graphic design agency.

Number of employees

Each employee carries an element of risk. A company with 100 employees will typically have more risks than a small business of three people. The more risks a company has, the higher its insurance rates.

Coverage needs

Again, the more coverage you need, the more you will pay.

What is an aggregate limit?

Some policies contain an aggregate limit, which is the maximum amount of money an insurance company will pay for claims issued against the named insured during the policy period.

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Conclusion

Business insurance is crucial in protecting your company's fortunes and reputation. Aligned with a strong risk management plan, your coverage can fit neatly into your company's budget with room to spare. Know what your company needs before researching options and you can find a cheap business insurance quote before you know it.

How to Get Cheap Business Insurance FAQ


What does small business insurance not cover?

Small business insurance does not protect against damages caused by your company's negligence or fraud. Standard policies do not cover losses stemming from natural disasters.

Do I really need business insurance?

Companies of all sizes across all industries should have some form of business insurance.

Why do I need small business insurance?

Business insurance helps cover personal and property damage and liability claims. If your company is not insured, then it might have to pay for damages from its own funds, which can result in bankruptcy.

How much does business insurance cost?

Business insurance rates differ by industry, location, and coverage types.

What kind of business insurance do I need?

All companies should look into obtaining general liability insurance. Companies can seek other types of insurance based on their industry and risks.

What is the difference between general liability and professional liability insurance?

General liability insurance deals with physical risks like bodily harm. Professional liability insurance deals with abstract risks like errors your company could make.

Do I need business insurance if I'm an LLC?

Business insurance for LLCs is a good idea. It can prevent out-of-pocket payments for claims that could devastate business finances.

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