Low Cost Business Insurance: Price vs Coverage

When shopping for low cost business insurance, it's important that you don't focus on cost to the exclusion of obtaining the valuable coverage you need. Your goal should be to strike a balance between cost and coverage where your business is protected, but your costs are manageable and do not cut too severely into your profit margins. There are many ways you can manage your costs.

Property Insurance

One of the best ways to strike a balance between price and coverage with property insurance is to increase your deductible. By increasing your deductible, you can maintain adequate coverage, while reducing your premium. If you increase your deductible to $1000 or $1500, you can save significantly on your premiums. Make sure that if you increase your deductible, you are able to afford it if you have to file a claim. The best way to protect yourself is to keep at least your deductible amount in savings. You can also decrease your risk by installing smoke alarms, a sprinkler fire alarm system, security cameras, and other safety devices. Also, be sure to contact your lender because many lenders have a maximum deductible amount that cannot be exceeded.

Disability Insurance

If your business would halt if you were unable to work, you cannot afford not to have disability insurance. However, you can manage the cost of your disability insurance by insuring yourself for the amount you will need to survive and pay your bills, not your entire replacement income. Add up all of your monthly bills (including incidentals and groceries), subtract from that the amount your spouse could contribute and any savings you could use, and then purchase disability insurance to cover the difference.

Liability Insurance

Liability insurance protects you in case a customer or client sues you for property damage or personal injury. While you can manage the cost by limiting your coverage, the cost of being without this coverage can be catastrophic to your business. However, you can minimize your risk by making sure your place of business is safe, clean, and easily accessible, adhering to disability law requirements in your area, and by ensuring that the products you sell are not dangerous. Work with an attorney to develop the proper liability language that is suitable to protect your business as well.

Business Interruption Insurance

If a catastrophic event, weather-related incident, or other action causes your business to become inoperable for a period of time, business interruption insurance is designed to pay your bills and keep you operational until you are able to reopen. As with disability insurance, you can manage the cost of business interruption insurance by obtaining as much coverage as you truly need to stay afloat. If you know you will be able to carry on a portion of your business from another location or online, you may be able to reduce the amount of coverage you have to have, which will reduce your premium cost.

Obtaining the least expensive insurance is not always the best choice; be sure you shop for the best coverage at the lowest price to have the best possible protection.

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