As you shop for business insurance in Whitestone, Queens County, New York, you are bound to come across industry-specific jargon. For instance, you will encounter the terms “premiums,” “policy limits,” and “deductibles” very frequently. So what exactly do these terms mean? To help you understand your commercial coverage, here’s what you need to know about premiums, policy limits, and deductibles.
Premiums
A premium is an amount that you pay for your insurance. Premiums are recurring payments, usually charged monthly, quarterly, semiannually, or annually. If you fail to pay your premium, then your insurer will eventually cancel your policy. Your premiums are dependent on your business’s unique factors, and different companies will have different premiums, even if they are securing coverage from the same insurance provider. For instance, your premiums will be affected by the following:
- The type of insurance you are buying
- The amount of coverage you need
- The policy limits you select
- The deductible you set
- The endorsements or policy riders that you add to your policy
- Your business’s type
- Your insurance history
- Your business’s location
- Your business’s revenue
- Your business’s assets (type and value)
- The specifics of your loss-control program
- The types of discounts that your business qualifies for
Tips to Reduce Your Business Insurance Premium
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Increase Your Deductible
The deductible is the amount you pay out of pocket for covered losses and damages. Therefore, choosing a higher deductible will decrease your premium.
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Explore Insurance Packages
If you need multiple forms of coverage, a business owner’s policy (BOP) might be a better option than individual policies. A BOP is affordable and also includes business interruption insurance and liability and property insurance.
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Minimize Risk
You will have to pay higher premiums if your business is at risk for accidents, lawsuits, and injuries. Consider reducing your business risk with workplace safety measures, theft-prevention programs, driver training programs, worker safety programs, and disaster preparation measures.
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Remove Unnecessary Coverage
As your business evolves and changes, so do your business insurance needs. Therefore, it is good to review your policy periodically to cut down on unwanted coverage. For example, if you have stopped using vehicles for your business, you no longer need commercial auto insurance coverage and can exclude it.
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Look for Discounts
Many insurance companies will offer a discount to businesses that implement security measures, train their employees on safety, refer them to other businesses or friends, or have been with them for years. Look for such discounts to reduce your premium.
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Pay Premiums in Advance
Sometimes, paying your premiums in a lump sum rather than in monthly installments will help you save on your business insurance costs.
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Don’t File Claims Frequently
Insurance providers may offer a discount to policyholders who have not filed claims for years. Therefore, avoid filing frequent claims to reduce your premium costs. Besides, if the deductibles are higher, you will not be tempted to file smaller claims.
Policy Limits
A policy limit is a maximum amount that your insurance provider will pay to cover a claim. Your policy limits depend on the amount of insurance that you decide to purchase; the more coverage you secure, the higher your policy limits. Please note that there are different types of policy limits depending on the type of policy you secure. Per-occurrence limits determine your maximum insurance payout for one specific incident. Aggregate limits establish the most that your policy will pay during the policy period.
Deductibles
Your deductible refers to the amount of money you will pay out of pocket before you can access your insurance coverage. The deductible system is a way for the policyholder and the insurance provider to share risk. Policyholders have the ability to set their own deductibles and, the higher the deductible they choose, the lower their premiums will be. While many business owners set very high deductibles as a money-saving strategy, you need to be careful. Setting your deductibles too high could make it impossible to access your insurance coverage when you need it the most.
Here’s what business owners need to know about their insurance premiums, policy limits, and deductibles. Are you looking for further assistance with your business insurance in Whitestone, Queens County, New York? If so, then contact the experts at 01 Insurance. We are ready to assist you with all your commercial coverage needs today.