You’ve poured your heart and soul into your small business, but one unexpected lawsuit could bring it all crashing down. That’s where liability insurance comes in, but with so many options, how do you find the cheapest one that still protects your business? I’ve done the research, so you don’t have to.
Understanding Your Liability Insurance Needs
First, let’s figure out what type of liability insurance you need. The most common is general liability insurance, which covers bodily injury, property damage, and personal injury claims. But your business might need more.
Common Business Types and Their Insurance Needs
- Retail stores need general liability insurance to cover slip-and-fall accidents, but they might also need product liability insurance if they sell products.
- Restaurants need general liability insurance, but they should also consider product liability insurance for foodborne illnesses and liquor liability insurance if they serve alcohol.
- Consultants might only need professional liability insurance (also known as errors and omissions insurance) to cover claims of negligence or misrepresentation.
- Contractors need general liability insurance, but they might also need workers’ compensation insurance if they’ve employees.
Finding the Cheapest Liability Insurance
Now that you know what type of insurance you need, it’s time to find the cheapest option. Here are some tips:
Shop Around
Don’t just go with the first insurance company you find. Get quotes from several different companies to compare prices and coverage. You can use online marketplaces like Insureon, Hiscox, or Next Insurance to compare quotes from multiple insurers.
Avoid This Common Mistake
One common mistake I see business owners make is choosing the cheapest policy without considering the coverage limits. You might save money upfront, but if a claim exceeds your policy’s limits, you’ll be on the hook for the rest. Always make sure your policy’s limits are high enough to protect your business.
Increase Your Deductible
Your deductible is the amount you pay out of pocket before your insurance kicks in. The higher your deductible, the lower your premium. Just make sure you can afford the deductible if you need to make a claim.
Bundle Your Policies
If you need more than one type of insurance, consider bundling them with the same insurer. Many insurers offer discounts for bundling policies, which can save you money.
Improve Your Risk Management
Insurance companies consider your business’s risk level when calculating your premium. The lower your risk, the lower your premium. Set up safety measures, like installing security cameras or requiring employees to complete safety training, to lower your risk and potentially lower your premium.
Other Ways to Save on Liability Insurance
Here are a few more ways to save on liability insurance:
Pay Annually Instead of Monthly
Some insurers charge a fee for paying your premium monthly. If you can afford to pay annually, you might save money in the long run.
Ask About Discounts
Some insurers offer discounts for things like being a member of a professional association, having a certain number of employees, or having a good claims history. Always ask about potential discounts.
Review Your Policy Regularly
Your business changes over time, and so do your insurance needs. Review your policy regularly to make sure you’re not paying for coverage you don’t need or missing out on discounts you qualify for.
The Cheapest Liability Insurance for Small Business
After doing extensive research, I’ve found that the cheapest liability insurance for small business depends on your specific needs and circumstances. However, here are a few options that consistently offer competitive rates:
Hiscox
Hiscox offers general liability insurance starting at $22.50 per month, with a $1 million per occurrence limit and a $2 million aggregate limit. They also offer professional liability insurance and product liability insurance. Hiscox is a good option for small businesses in professional services, like consultants, marketing agencies, and IT services.
Next Insurance
Next Insurance offers general liability insurance starting at $25 per month, with a $1 million per occurrence limit and a $2 million aggregate limit. They also offer professional liability insurance and workers’ compensation insurance. Next Insurance is a good option for small businesses in retail, food and beverage, and contracting.
Insureon
Insureon is an online marketplace that allows you to compare quotes from multiple insurers. They offer general liability insurance, professional liability insurance, product liability insurance, and workers’ compensation insurance. Insureon is a good option if you want to shop around and compare rates from different insurers.
The Hartford
The Hartford offers general liability insurance starting at $30 per month, with a $1 million per occurrence limit and a $2 million aggregate limit. They also offer professional liability insurance and workers’ compensation insurance. The Hartford is a good option for small businesses in professional services, like accountants, lawyers, and real estate agents.
Remember, the cheapest option isn’t always the best. Make sure to compare coverage limits, deductibles, and exclusions before making a decision. And always read the fine print to make sure you understand what’s covered and what’s not.
Finding the cheapest liability insurance for your small business doesn’t have to be a daunting task. By understanding your needs, shopping around, and taking advantage of discounts, you can find a policy that protects your business without breaking the bank. Don’t leave your business vulnerable to lawsuits. Get insured today.
