Are there Any Discounts for Business Liability Insurance Coverage?

Business liability coverage is a necessary expense to protect a company--large or small--from the financial consequences of a variety of perils. Securing business liability coverage requires a balance of purchasing adequate coverage at a reasonable price, much like when hosting a successful job fair. Being under-insured can prove disastrous if there is an accident on your property, but paying too much for unnecessary coverage or a pricey policy can degrade your bottom line. Finding a fair rate and all the available discounts ensures that you are properly covered at a price you can afford.

The first step in getting adequate coverage at a fair price is knowing exactly what forms of coverage you need. There are two main types of business liability insurance to cover most claims: general liability and professional liability. All businesses need general liability, which covers claims of bodily injury or property damage at the workplace. Professional liability is necessary for companies that provide professional services. Sometimes called errors and omissions coverage, this type covers claims of negligence and errors in practice.

Another form of business insurance is worker's compensation coverage. This covers various expenses for workers injured on the job, including medical bills and lost wages. As a component of worker's compensation coverage is employer's liability insurance. Employer's liability coverage protects the business if the injured employee claims his ailment is a result of dangerous working conditions. This coverage will help pay any resulting settlement and the business's legal fees.

Finally, businesses should invest in property insurance. Property insurance covers loss from theft or disasters. Though it is not a form of liability coverage, buying a Business Owner's Policy (BOP)--a policy combining property insurance and general liability insurance--can save you money. Like any form of insurance, business insurance agencies encourage bundling of policies, and they reward customers who do so with discounts. Ask your agent about any additional discounts available for adding professional liability and employer's liability coverage to your BOP.

Other Savings Opportunities

In addition to bundling policies, insurance companies offer various discounts and opportunities for savings. Businesses that are members of trade associations and other professional groups may be eligible for discounts on their general liability coverage. Find out from your trade association which providers they endorse, and compare rates from several providers with that business liability insurance discount in mind. Comparing rates from at least four providers is the best way to save money, since policies can vary in price significantly.

Insurance providers periodically lower the rates of their customers who carry the least liability. This means making as few claims as possible and taking measures toward loss control. For general liability coverage, it is prudent to avoid filing a claim unless you absolutely cannot afford the expenses. As a rule of thumb, claims valued at three times your deductible or more are worthy of a claim. Each claim raises your rates, so use them sparingly.

Ask your provider about recommended loss control measures. This might include installing a security system, having regular safety inspections or even hiring a risk manager. Businesses that demonstrate an investment in lessening their risk of loss are often rewarded with lower rates. On a related note, when a company makes significant changes like offering a new service, the insurance provider should be notified to keep the company abreast of premium changes and policy modifications.

Unlike most forms of insurance, general liability typically does not carry a deductible. Businesses can request a deductible, and this is a sure way to lower your rates. When you assume a portion of the loss, you are rewarded. Just be sure you have the cash-on-hand to meet the deductible should you make a claim.

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