How To Reduce Business Insurance Costs With Fewer Liability Claims

Accidents and other unforeseen circumstances are events that nobody wishes for; unfortunately, just because you don’t wish for them doesn’t mean they won’t happen. One can wake up to the news of a fire outbreak or a burglary attack on your business premises. This is why getting business insurance is a must-have for all businesses. Although business insurance could be quite expensive, its benefits usually far outweigh the cost in the long run. It protects businesses from unprecedented risks, irrespective of the size and make-up of a business.

What is the Cost of Business Insurance?

The amount you will need to pay for your business insurance is largely dependent on the number of plans you are subscribing for. 

For a one-man business, having just property and liability insurance could be fine. However, for a business with employees, the state could require that other coverages such as worker’s compensation, disability insurance, and unemployment insurance are purchased. For a landscaping industry, landscaping business insurance covers all the needed coverage for the company. The total cost of business insurance depends on the business size, the number of workers, and the properties you own. This could range from a thousand dollars to 20 thousand dollars.

How to Reduce the Cost of Your Business Insurance With Fewer Liability Claims

Your company’s insurance cost can take up a great percentage of your company’s expenses. Thankfully, there are ways you can reduce this cost. The following tips could help you reduce your business insurance cost.

Slip and Fall Claims

One of the most common liability claims most businesses pay for is a slip and fall claim. So if you observe that the number of people slipping and falling on your business premises is high, it is important to find out the cause. It could be a result of poor mopping skills or other infrastructural defects. You should address this issue and fix the problems as soon as you can. You could also put wet floor signs in case of a wet floor to help avoid slipping. This will help minimize the liability risks and save you some money.

Food-related Illness

For food businesses, focusing on training and improved safety measures can help cut the cost of business insurance. If customers regularly get sick because of your food, this will surely increase the cost of your business insurance. To prevent this from happening, you must ensure to carry out regular inspections to find out the risk areas to work on. Getting sick after consuming your food can also damage your reputation, so you must do everything to prevent it from happening. 

Defective Product Claims

Anyone running a production business knows that it is almost impossible to distribute wholesale goods without defective products. However, proper training can help reduce the number of defective goods sent out. Improving the quality assurance process could help reduce your defective product claims.

Other ways to reduce your business insurance cost include:

Ask for Discounts

Asking your insurance provider for available discounts or how to qualify for a discount is one way to reduce your business insurance cost. Your business could be qualified for a discount based on the nature of the business or even the business size. You could also qualify for a safety discount whenever there is a new security installation or upgrade for your business or a loyalty discount if you’ve been with your provider for a time frame. 

So, never hesitate to ask your insurance provider regarding the available discounts for your business. You might also be eligible for safety discounts after adding new security features or for special discounts when referring friends, family, or other businesses. Alternatively, you can also check trade associations and publications related to your industry to find more opportunities to save on insurance costs.

Pay in Advance

It is easier to get discounts when you pay in advance because most insurance providers offer discounts for early payment. The discounts are even better and more assured when you pay for longer duration plans like 6 or 12 months. 

Although the cost for purchasing long-duration plans might be a large lump sum, however, when broken down, you will realize that you’ve saved a lot during the year. If you do not have the financial strength to purchase such plans in the current year, you can choose to save towards it monthly for the next year.

Stop All Unnecessary Coverage

As a business owner, you need to be smart when it comes to your expenses. For example, paying for car insurance when you don’t own a corporate car is not a smart move. To avoid paying for any unnecessary business insurance plan, you should try and make a list of all the insurance coverage you are currently paying for. After which, you must critically analyze your business needs and carefully review each insurance policy and check for benefit duplication. This will help you eliminate all unnecessary coverage and save costs.

For instance, assess if you actually need professional liability insurance, product liability insurance, property insurance, and umbrella insurance.

Typically, general liability insurance will suffice if you have a small business, as this blanket insurance policy already provides coverage for accidents and injuries that occur in the course of the business. Plus, it also provides you protection should your client or customers claim that you became negligent.

If you operate your business in a physical location out and far from your home, then it’s a good idea to get property insurance to protect you from cases of theft, damage, and disaster, which can all cause an interruption in your operations or the eventual closure of your business.

After all, you’re the best person who can know what the specific needs of your business are. Always think thoroughly to determine what truly fits your business. If you have any doubts or concerns, you can always ask your insurance provider for assistance.

Search for Package Deals

Getting packaged deals can save you a lot in terms of business insurance costs. For example, the Business Owner Policy package packs both property and liability insurance as a single policy. This policy also provides your business with bonuses like business interruption insurance. 

Typically, a bundled Business Owner Policy is always cheaper than individual policies.

Prioritize Safety

Another way to reduce insurance premiums is by taking safety seriously. Devise safety plans to keep yourself and your employees safe, eliminate workplace hazards, and reduce accidents, injuries, and lawsuits. However, be mindful that a safety plan will be useless without proper enforcement. You should not only talk the talk but walk the walk as well to show that you’re serious about safety at work and accident prevention.

Hand out copies of the plan to the employees and ensure their strict adherence. Put together training or hire a third-party trainer to educate your staff further about proper safety practices.

Staff who have been exposed to proper training are less likely to injure or cause harm to other employees or customers. Thus, reducing business losses and lowering your insurance premiums.

Meanwhile, you must also look out for new technologies and procedures available and adapt or implement ones that can benefit your business. Review your safety policies regularly and align them with new updates as necessary. If you’re unsure how to carry out safety plans and programs, you can always reach out to your insurer for help.

Show that the business is well-run

Insurance companies ask for lower business insurance premiums for businesses that are managed properly. Show that your business is operating with high standards through the timely filing of financial accounts, having quality control procedures, doing audits and risk assessments, training employees, and ensuring their ongoing development.

Minimize risks

The higher the risk of your business, the higher the premium the insurance provider is going to ask for coverage. So, if you want to save on insurance costs, it’s vital that you implement various risk reduction measures. Some ways to minimize risks include additional workplace safety measures, disaster preparation programs, theft prevention programs, and employee safety training seminars. You can also discuss this with your insurer and ask for other actions that they can recommend which can lower the risk to your business and your rates.


Business insurance can be a substantial expense for any business. What’s great is that you can follow the steps above to reduce the premiums while ensuring your company stays protected. Still, be mindful that while there’s always a price on business insurance, you can’t put any price tag on the peace of mind you’ll get, knowing that the business you’ve worked hard and devoted time for is secured.