As a savvy business owner, you of course want to save money wherever you can. There is little point in wasting hard-won profits on unnecessary expenses. One thing you should never cut costs on, however, is your insurance.
No doubt, you receive many solicitations from various insurance brokers promising to save you money on insurance. Some insurance policies may even be priced below market value. But if an offer seems too good to be true, it usually is. Purchasing a cut-rate insurance policy may save you money in the short-term, but in the long-run it could cost your business dearly.
Weigh cost vs. coverage
When you are shopping for insurance for your business, you should definitely take price into consideration—but it shouldn’t be your only deciding factor. Don’t accept a cheap offer that provides less coverage. Cut-rate insurance is usually cheap because it offers fewer services. And if your business suffers a catastrophe, you could be out big money.
Consider soft benefits
There are many soft benefits that you may lose with a cheap provider. Cut-rate insurance is less likely to have important things like:
- Responsive, 24/7 support
- Knowledgeable, patient adjusters
- Extensive recommendations for trustworthy repair shops and contractors
- Loyalty, even after a few losses
Shop around and negotiate
You can use the cheap prices of one insurance provider as a bargaining chip with another. Whether you are shopping for business insurance for the first time or are thinking of switching companies, negotiate wisely to get the best price. Talk to your current broker or agent—they may be willing to lower their prices in order to keep your business. An attorney can also help represent you to your insurance company.