As with most other things, when it comes to insurance, you get what you pay for. Don't pay to insurance against minor losses, but don't ignore real perils just because coverage carries hefty premiums.

You can lower your premiums is you take a higher deductible. Many agents recommend taking higher deductibles on property insurance and putting the money you save toward additional liability coverage instead.

How much can you afford for a deductible or uninsured risk? Look at your cash flow. If you can pay for a loss out of cash on hand, consider not insuring it.

You can also save money on insurance by obtaining it through a trade group or association. Many associations offer insurance tailored to your industry needs--everything from disability and health to liability and property coverage. You can also help keep insurance costs down by practicing these good insurance habits:

  • Review your needs and coverage once a year. If your circumstances or assets have changed, you may need to adjust your insurance coverage.
  • Ask your insurance agent for risk-reduction assistance. He or she should be able to visit your premises and identify improvements that would create a safer facility.
  • Check out new insurance products. Ask your agent to keep you up-to-date on new types of coverage you may want to consider.
  • Take time to shop for the best, most appropriate coverage. A few hours invested upfront can save thousands of dollars in premiums or claims down the road.


Excerpted from The Small Business Encyclopedia, Start Your Own Business and Entrepreneur magazine ("Needs to Know"). All information is intended to be general in nature, without regard to specific geographical areas or circumstances, and should only be relied upon after consulting an appropriate expert, such as an insurance agent.