As a business owner, you are going to want to know what each part of your outgoing expenses is going towards to make sure you are spending as wisely as possible. One of the places where you may be concerned that you are spending too much money is your insurance. Each and every insurance policy you take out is incredibly important. Here is a breakdown of all the costs you can expect in your general liability insurance.
The Premium
The premium is the part of your insurance which you are most likely to be familiar with as you will have no doubt encountered a similar structure for another type of insurance. This is the fee which you pay either monthly or annually depending on your plan. You need to make sure that you keep an eye on your premium to make sure that you are spending the right amount. Every year that your insurance renews, you should take the time to shop around and see if there is a better deal for you somewhere else on the market.
The Deductible
If you are looking to get your hands on cheap general liability insurance for your business, you should look into taking a higher deductible. This is the part of the claim which you actually pay. Say, for example, you had a policy which had a deductible of $1000 on a payout of $10,000. This means that if you were to put a claim in for $10,000, you need to pay $1000 of it yourself before you receive the other $9000 from the insurance company.
One of the best ways to drive down the cost of your premiums is to opt for a higher deductible. If we go back to our example, if you agree to pay $2000 towards the $10,000 cost, your insurance company will lower your premiums. Which would you rather do; pay more for something you will never use or take the gamble a pay a bit less with the chance you may pay more if you have to? Depending on your circumstances, either pathway could be right for you and your business.
Many Options
You might look at the cost of general liability insurance and think that there is no way around it. However, if you are prepared to put in a little leg-work, you might be able to find a great deal in addition to playing with the ratios explained above.If you opt for a smaller insurance company, you may be able to create a set of policies which are more flexible than others. A larger company might have more options but they might also be a little less willing to create something custom for you.
Insurance does not have to be a stress or a worry. With a little knowledge about how your policy is constructed, you will hopefully be able to find yourself the best deal possible for your business.
