You know you need insurance to protect your business against unexpected damages, but since running a small business is costly enough as it is, you might worry about your insurance rates. So, how much does small business insurance cost?
Fortunately, small business insurance is typically very affordable to make it as accessible as possible to small business owners. However, as there are several types of coverages that fall under the small business insurance umbrella, your rates will depend on a variety of factors, including your industry, how many people you employ, and more.
Here’s what you need to know about how much small business insurance costs.
Why Do You Need Small Business Insurance?
Small businesses face a wide range of risks that could result in significant financial damages. From windstorms that damage company property to slip-and-fall accidents that cause costly lawsuits, small business insurance can mitigate your losses if you suffer due to a covered event.
As many small businesses do not have the cash to pay for these damages themselves, business insurance can prevent a single loss from putting you out of business.
Types of Small Business Insurance
Small business insurance is an umbrella term that includes several coverages designed to protect small businesses against common risks they might face. While some policies are suitable for all businesses, some are dependent on your company’s industry and location.
The most common types of business insurance are:
- General liability insurance
- Professional liability insurance
- Business owner’s policy (BOP)
- Workers’ compensation insurance
- Commercial property insurance
- Commercial umbrella insurance
Small businesses can often bundle several of these insurance policies together to save on their monthly premiums.
Aside from these coverages, there are several other types of small business insurance that may be necessary depending on your specific circumstances.
Other insurance options for small businesses include:
- Cyber liability insurance
- Restaurant and bar insurance
- Commercial flood insurance
- Commercial auto insurance
- Builder’s risk insurance
These may or may not be necessary depending on your industry, location, and the nature of your business.
Factors That Impact the Cost of Small Business Insurance
There are several aspects of your business that can impact your small business insurance rates, including:
- Location: If your business is more susceptible to weather-related damages due to your location, you may face higher rates of commercial property insurance.
- Industry: Many businesses face the same common risks, like theft, fires, and natural disasters, but others face more unique risks. For example, businesses that deal with sensitive customer data may need cyber liability insurance, while construction businesses may need builder’s risk insurance.
- Claims history: If your business has never filed a claim before, you may be eligible for lower business insurance rates.
- Coverage limits: If you want more coverage to protect against certain risks, your premiums will likely be more expensive.
If your rates are higher than you expected due to these factors, there are ways to lower your costs.
Ways to Save on Small Business Insurance
Small businesses that want to lower their insurance rates have a few options at their disposal.
Keep these tips in mind when shopping for small business insurance policies:
- Bundle coverages: One of these best ways to save is to bundle insurance policies together for a discount. The most common bundle is a business owner’s policy (BOP), which combines general liability insurance and commercial property insurance into a single affordable policy.
- Shop around: When shopping for business insurance, it’s important to shop around and compare quotes from at least three to four insurance companies to find the best rates available.
- Ask about discounts: In some cases, businesses may be eligible for discounted insurance rates. For example, some insurers offer discounts for businesses that install safety devices, like building alarms and fire safety equipment. Make sure to ask your insurance agent about discounts that you may be eligible for.
- Create a risk management plan: Insurance companies base your rate on your likelihood of filing a claim. One of the best ways to cut your rates is to create and enact a risk management plan to reduce the likelihood of accidents at your workplace.
Small business insurance is very affordable, and with these tips, you may save even more money.
Request a Quote
Small business insurance is essential for any business to protect against the many hazards that can result in significant financial damages.
At KSA Insurance, we work with small businesses in South Carolina and across the southeastern United States to help them find affordable small business insurance policies that protect them against the unexpected.
Contact us today to request a quote and learn more about how much small business insurance costs in South Carolina.