There has never been a better time to get cheap business insurance . Insurance companies’ profits are dismal and competition is fierce. You can take advantage of that by playing a little hardball with them. Sure, insurance is a small business tax deduction, but don’t be lulled into complacency. A penny saved is a dollar earned in the Pilgrim’s book. Let’s save you some money. Here’s how:
First, understand that your insurance agent isn’t your insurance agent. She’s the insurance company’s agent. Don’t expect her to get you the best deal possible unless she has to. Your job, should you decide to accept it, is to make her get you the best deal. But make no mistake, the agent is the key to you getting the proper business insurance at the lowest possible price.
According to a recent article in the Investor’s Business Daily, you have three options.
1. Ask the agent to renew your current policy with your current provider
This is a stinky option. You won’t save a dime this way. Your agent has no incentive.
2. Have the agent shop different companies to look for better rates
This is a little better than the first alternative, but it still rates high on the stinker meter. Your agent still knows she’s getting your business.
3. Get three agents to compete for your business (best option)
This keeps all the agents hungry. As a result, they’ll fight tooth and nail with the insurance companies to get you the best deal.
The IBD goes on to suggest that you get the names of good agents from other small business owners in your industry. While you’re at it, call your state insurance commissioner to make sure the agents in question have a good clean record and are licensed in your state.
A final tip is to make sure you don’t wait til the last minute in order to get business insurance quotes. Start working on this at least 90 days before your coverage ends. This way, you’ll have plenty of time to weigh the options – and pressure the insurance agent. If you wait til the last minute, you won’t know what the renewal prices are and you won’t have any time to do anything about it.
Just about the only time this wouldn’t work is if you are looking for disability insurance for the self-employed. Most companies hate writing these policies. In my experience, you’re lucky if you can find a company to take you.
What has been the most effective way you found to get the cheapest business insurance? Do you have any other great business suggestions?
It looks like the cost of product liability insurance is going to kill our startup. We planned to launch a new model airplane for kids in the spring of 2011, but after talking to an ins broker about product liability insurance, I am not sure. He said that quotes for our product will probably come somewhere in the range of $5,000 to $25,000 per year. For a couple of guys starting a business with just their own pocket money, that is overwhelming. How did the BB gun ever get to market? You have a better chance of shooting your eye out with that than our airplane.
Roger, Did you ever figure out a way to get insured and off the ground
Nunzio Bruno says
Great points about biz insurance! I think small/mid size biz owners get so caught up in making sure they’re biz is running smoothly that stuff like this gets put on the back burner. I think the biggest point you made was to get them competing for your business. That and that your agent is a rep of their company and can only do as well for you as their comapany’s products allow.