How to Get Cheap Business Insurance
Owning a business is an empowering venture that can bring great success or financial uncertainty. Whether you own a hair salon or a local convenience store, the risk of running a small business without adequate protection against unforeseen events can lead to financial ruin. To remain prepared against these unforeseen events, it is important that new start up companies and existing small businesses invest in business insurance. While it may be easy to find an insurance provider using the internet, it is often harder to find an affordable insurance plan that provides suitable coverage and meets the financial needs of a business.
With the UK in its third national lockdown, many small businesses have been struck with low customer counts and high accumulative costs. To reduce this impact, business owners must look to make cost effective decisions that do not hinder business performance. Instead of firing staff during a pandemic, business owners could look to slash their annual costs by switching to a cheap business insurance provider. To help you find cheap business insurance, we at ShieldWise have composed an easy-to-read guide that the key elements of business insurance.
As a business owner there is no better time than now to find an affordable business insurance provider that will help you weather the current storm that is COVID-19.
What is business insurance?
Simply put, business insurance is a policy set in place to protect businesses against financial losses caused by unfortunate events that may occur during their regular course of business. Whether it is property damage or a compensation claim, business insurance can provide you with the necessary support needed to address the issue at hand.
How does business insurance work?
When investing in a business insurance policy, you are required to pay an agreed premium rate that guarantees coverage. The size of this premium rate is dependent on the businesses size, location and the deductible paid before coverage begins. In the event an incident covered by the policy occurs, the owner of the business will receive a payout from the insurance company. This payout can cover any financial loss that may hinder normal business activities.
What types of business insurance policies should small businesses consider?
Highlighted in the previous section, there are a variety of different business insurance policies that offer different coverage services and premium prices. Operating a small business, the main insurance policies you should be considering are:
Public Liability Insurance
Sometimes referred to as “commercial liability”, public liability insurance is a policy plan that provides cover against claims of injury, illness and/or loss made by the public. These claims can include injury on business property, suspected food poisoning after consumption of a product, and damage of customer property. In the event of a claim being made, this policy provides financial support that covers the cost of any legal defence, compensation payments, and attributed medical costs.
Though it is not required by law, some trading authorities require businesses to have a certain level of public liability cover in place before they are able to operate. Depending on the industry, having liability cover can serve to not only protect a business but also open avenues to new business opportunities. For any small business looking to establish a store front once lockdown is over, a cheap and reliable public liability plan may be essential.
Business Contents Insurance
Business contents insurance is a policy geared towards providing cover for businesses that rely on their equipment. Crucial in many industries, a business’s equipment can be considered a key attribute to its success. With a large portion of businesses being remained close during the current lockdown, item theft remains a real possibility as the streets and businesses run empty. To prevent any issues that may arise from equipment damage or theft, this insurance policy provides the necessary financial support needed to quickly replace equipment.
With reports suggesting a 16% increase in business start-ups in the UK, many small businesses have begun to operate from home. Though this may seem cost-effective, normal domestic insurance policies do not provide sufficient cover for business equipment and stock. For this reason, a cheap business insurance policy may be ideal for new entrepreneurs that choose to use their home as a base of operations.
Professional Indemnity Insurance
Professional indemnity insurance is a policy that provides cover against claims of professional negligence and/or mistake made by a customer. In the realm of business, nothing possesses more weight than the reputation a business upholds. The influence of a business’s reputation can help it ascend to greatness or collapse in bankruptcy. For this reason, some insurance companies offer professional indemnity plans that protect their clients against issues of defamation, negligence, and breaches of consumer law.
This policy is designed to provide the necessary financial support needed to cover the cost of any legal defence, compensation payments or additional costs required to deal with a customer claim. Due to the variety of business industries, most professional indemnity plans charge a premium based on the value of a businesses project and the risk of the industry. This insurance plan is crucial for small businesses that offer consultancy or accountancy services.
Employers’ Liability Insurance
As an employer, a business owner is responsible for the health and safety of their employees as they work. In the event an employee suffers an injury in the workplace, an employer could be made liable for the incident and face a fine. To deal with this potential issue, employers’ liability insurance policies offer coverage that protects businesses against compensation claims made by employees that report work-related illnesses or injuries.
This policy plan provides coverage for all legal costs and compensation pay demands a business is required to adhere to if a claim goes to court. Due to the importance of workplace safety, employers’ liability insurance is a legal requirement for most businesses in the UK that operate with paid and unpaid employees. Many insurance companies offer a minimum cover of £5 million, meaning if a small business must face a potential claim, they are able to deal with the matter without suffering heavy financial loss.
Business Income Insurance
With the recent outbreak of COVID-19, it would be wise for business owners to consider preparing for the likelihood of another crisis occurring that could cease trading. While other insurance policies offer protection, most policy types do not provide cover in the event of an incident that can affect trading for a long period. Incidents including fires, floods, disease outbreaks, and other “acts of god” events are typically not covered by other policy plans.
Business income insurance, sometimes referred to as “business interruption cover” is a policy plan developed to provide cover in the event of a crisis that leaves a business unable to trade. Policyholders who file a claim will receive financial support to help pay the necessary costs needed to stay afloat during the suspension of business. The presence of this policy has prevented a large majority of businesses going bankrupt during the recent global pandemic.
What factors influence business insurance prices?
The idea of establishing a business is a venture that is often an amalgamation of different attributes and events that led to its conception. Similar to this, insurance companies tend to assess a variety of factors and circumstances to determine the valuation of an insurance quote. Due to the high valuation of some cover plans, this assessment is often considered a necessity to ensure that an insurer is not making a loss.
To help you understand what aspects of your business may be affecting your chances of getting cheap business insurance, the following section will highlight some of the key factors insurers consider when pricing policies.
While this may seem simple, some business owners can be blind to the level of risk associated with establishing a business in a particular industry. For example, if a fisherman were to get insurance coverage on his business, the number of events that could lead to a claim would be at a higher rate than that of a bakery. To deal with this potential issue, insurance providers often charge a higher premium depending on the level of risk associated a business.
Pretty straight-forward, if a business operates in a highly populated area or in an area with a high crime rate, they will be expected to pay a higher premium rate. Operating in high density locations leaves a business susceptible to crimes that can lead to both frequent claims and false claims.
This factor has more to do with the number of employees a business manages. As highlighted earlier, it is often a legal requirement to have employee liability insurance in the event of any injury or illness claims. The more employees an insurance company must cover, the higher the premium rate a business must pay.
Level of Coverage
Typically, the more cover you request, the more you will pay. Depending on the type of business you operate, business owners may at times be required to apply for several different business insurance policies to remain protected against different potential issues. Not all policy types are valued the same, meaning some cover plans could be the reason as to why your quoted premium rates are so high.
How to find cheap business insurance
Read the Fine Print
What can often go a miss by some policyholders are the terms and conditions associated with their coverage plan. In many cases, business owners have been shown to pay higher premium rates because they were unaware of the claim limitations and cancellation fees tied to their plan. To get cheap business insurance always read the fine print to ensure you are not being roped into accepting a clause you do not agree with.
Look at Package Policies
Some business insurance providers offer policy bundles that can be cheaper than a stand-alone policy. Depending on the policy type, it can often be cheaper to look at policy package deals promoted by business insurance providers. These package deals can contain several different cover plans that may suit you. However, it does bare mentioning that these are not always the cheapest options.
Choose a Higher Deductible
One way to look for cheap business insurance is looking at the deductible you pay before the coverage starts. Though it may be off putting to pay a high sum before your cover has begun, choosing a higher policy deductible typically results in lower annual or monthly premium rates. Pay big early so you can pay small later.
Improve Your Safety Record
This tip is geared towards small business owners that have a small number of staff that are not family. When dealing with liability insurance, it may be beneficial to highlight your plans of establishing a safe environment that meets the guidelines of the best health and safety guidelines. Showcasing a prioritisation to meet safety regulations can at times slash a few pounds off your premium rate.
Choose Plans Based on Your Business
While it may be good to have protection, too much protection can be costly. To get cheap business insurance, it is important to tailor your coverage to the needs and structure of your business. For example, operating a business alone from home does not require employee or public liability insurance. Cheap business insurance requires finding a balance between reliable protection and cost-effective decisions.
Make Use of a Comparison Site
With a variety of business insurance companies offering similar plans at different prices, it is often ideal to use a comparison site to compare quotes beforehand. This can stop you from paying a cancellation fee in the future when you opt to switch to a cheap business insurance provider. Using a comparison site can help you sift through hundreds of business insurance policies to find the one that is right for you.
If you are unsure about what comparison website to use, we at ShieldWise have you covered. With an ethos to provide an exceptional platform that helps our customers find the right insurance provider, we offer a comparison service that instantly locates affordable insurance plans that meet your demands. Here at ShieldWise, we help you save money, time, and your sanity to get cheap business insurance.