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Hello Insurance. Goodbye Risk.


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Hello Insurance. Goodbye Risk.

When it comes down to it, all insurance really serves a single purpose. It reduces your risk. Perhaps you cannot afford to risk having to pay $100,000 if someone is badly injured on your property. You'd buy homeowners insurance to protect you from that risk. Maybe you don't want to have to shell out $20,000 for a new car if someone drives into the side of yours in a parking lot. You'd buy comprehensive car insurance to cover that risk. More insurance equals less risk. But how much risk do you need to protect against, and how much insurance is enough? Only you can answer that question, and you should have a better idea of your answer after reading the articles on this website.

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How To Reduce Business Insurance Premiums Without Extra Risk

If a business is willing to take on extra risk through increasing deductibles or lowering premiums, there is no shortage of ways to save on business insurance. In many cases, though, taking on additional risk isn't wise. If you run a business, here's how to reduce your business insurance premiums without increasing your business' risk exposure.

Get a BOP or CPP

While business insurance coverages are occasionally purchased individually, they're more often bundled together in a package policy. There are two main types of package policies that businesses may get.

Business owners' policies (BOPs) come with a few basic protections and are fairly standardized. These policies tend to work well for small businesses that have typical insurance needs.

Commercial package policies (CPPs) usually offer the protections that BOPs do as well as many other protections. These policies are best for businesses that have many insurance needs or require specific coverages.

Regardless of whether you get a BOP or CPP for your business, you're bound to save with either type of package policy. Insurance companies offer discounts when coverages are packaged together. Thanks to this discount, the cost of either package policy will be much less than what you'd pay for all of their coverages if you bought the coverages individually.

Procure Liability Insurance Through Secondary Policies

Many business insurance policies offer liability coverage for certain situations where a customer, vendor, or another party might sue your business. You'll almost certainly have to get some liability coverage through primary insurance policies, and this type of coverage is widely available.

Whenever possible, however, you should try to procure liability coverage through a secondary policy. Secondary policies only provide protection when a primary policy's liability limit has been reached (hence the terms primary policy and secondary policy). 

Because a claim must exceed a primary policy's limit before a secondary policy begins to pay on the claim, secondary policies are able to provide vast amounts of coverage at extremely affordable rates. In many cases, secondary policies will provide millions of dollars in coverage and still have premiums that even a small business can afford to pay.

There are two types of secondary liability policies that your business might procure. A commercial umbrella policy is appropriate if you need to supplement multiple primary business insurance policies. An excess liability policy is better if you need to supplement only one primary business insurance policy. Both types of secondary policies are available in package policies.

For more information, contact a business insurance company.