7 Tips to Lower Your Contractor Insurance Costs

As a responsible business owner, finding a great insurance policy is important to you. It’s the best way to safeguard your interests and protect both yourself and your employees. Great contractor insurance coverage shouldn’t feel like it’s pinching your wallet, however. Taking a little time to implement these practical tips can help you keep your insurance rates low without sacrificing your coverage.

How to Save on Your Contractor Insurance Costs

Ready to save some extra cash for your business? Let’s get started with our top money-saving ways to keep your insurance rates nice and affordable.

#1: Assess Your Policies Regularly

Make sure your coverage grows with your business. While extra coverage means extra rates, making sure you aren’t caught underinsured could save you big money on lawsuits, accidents, and claims.

Make sure you have the coverage you need. If you use your personal vehicle for work, for example, you’ll need commercial vehicle insurance in addition to your personal auto policy. If you have employees, workers compensation insurance will allow you to provide them with wage replacement medical benefits in case they’re injured on the job. Tools and equipment coverage, or inland marine insurance, will protect the high-value tools and equipment you need to get the job done.

#2: Look for Savings in Your Current Coverage

While being underinsured can cost you in the long run, that doesn’t mean you need to pile on excessive coverage. Being over-insured can be hard on the wallet, too. Look through your current insurance policies to see if there’s anything you realistically don’t need. For example, do you use all of the equipment your policy covers? Perhaps you have vehicles insured that you no longer use. Cutting coverage that you don’t need could save you a lot of money.

#3: Bundle Your Contractor Insurance Policies

Take advantage of any discounts you’ll get for bundling your policies together. Most insurance providers will offer you policy discounts when you combine multiple insurance policies If you get a package policy combining general liability and commercial auto insurance, for example, your insurance company may offer competitive discounts.

#4: Know When to Take a Minor Loss Instead of Filing a Claim

If you’ve suffered a minor loss, you may want to think twice before filing a small dollar claim. The number of claims you file impacts your rates. The greater the number of claims, the more likely you are to see a jump in rates. For example, if a toolbox was stolen out of your truck, replacing it yourself and taking the loss might save you from increasing insurance rates. It may be cheaper to pay a minor loss out-of-pocket instead of filing a claim that will cost you more money in the long run. It’s up to you to decide if an increase in your rates is worth it.

#5: Manage Your Risks

Risk management is a vital part of keeping your business safe. By managing your risks you can avoid filing claims- and the more claims you have, the higher your premiums can get. You can save yourself a lot of money by implementing a solid risk management plan. This comes down to answering two questions: What are the potential hazards to your business? How can you avoid them?

Potential risks for contractors may include employee safety hazards, construction defects, or poor site conditions. Once you’ve identified potential risks and how much they could cost you, take steps to avoid them. For example, you may spend more time on employee training or put new safety regulations in place. While taking precautions against certain risks can’t protect you from accidents entirely, it very likely can reduce the likelihood that you need to file a claim.

#6: Increase Your Deductibles

A deductible is the amount of money you pay out of pocket whenever you file a claim. Opting for a higher deductible will often lower your premiums. Increasing your deductibles is not without its risks- if you choose a deductible that is unaffordable, you risk harming your business financially. If you choose to lower your premiums through a higher deductible, make sure your new deductible is something you could reasonably afford.

#7: Choose a Specialist

Certain brokers specialize in insuring specific types of businesses. Companies that specialize in contractor insurance often offer the best rates. Furthermore, they know what the needs for your specific business are, so they can offer you comprehensive coverage. You’ll want to make sure you get your quote from a broker that can offer you the coverage you need for your contracting business in a competitively priced bundle.

Take time to make sure you’re saving as much money on your rates as you can: bundle your policies, make sure you have the coverage you need, and make sure you’re smart about how much you pay for your deductible and which claims you file. You can slim down your rates and make sure your contractor insurance is still protecting you efficiently. The best coverage at the most affordable rates? That’s good business.


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