Business Insurance – How Should One Pay?
Jun 24, 2019
Business insurance is one of the most essential items for you to have when starting a business.
By design, commercial insurance is intended to provide both you and your business with security from financial risks.
Yet, too often, small companies view covering their business with the right insurance as an unnecessary expense because of their size.
However, the reality of the matter is that business insurance can be a lifesaver in case you run into unforeseen obstacles.
Is your business covered? If so, which type of insurance do you have? Here are five types of insurance a small business should have:
- Commercial property insurance
- Commercial auto insurance
- General liability insurance
- Professional liability insurance
- Workers’ compensation insurance
How Should One Pay for Business Insurance?
The right business insurance coverage provides your small business with the safety net it needs.
However, while most business owners recognise the importance of protecting their businesses with insurance, many are not sure of how to pay for the coverage.
By far, the most common question that small business owners ask when getting business insurance is: “How should one pay for commercial insurance? Should I pay monthly or annually?”
The cost of adding business insurance to your expenses can be daunting, so for many small business owners, it’s a relief to pay in instalments.
After all, most insurance companies today allow you to either spread your insurance payments out over the course of the year or pay for the policy annually.
However, which is the best option to choose? Well, the correct answer will depend on the unique specifics of your business; it pays to understand each option.
Some of the things you’ll want to think about when deciding how to pay for insurance include:
- What are the pros of pay-as-you-go business insurance?
- What are the advantages of annual business insurance payments?
- What are the factors that affect the cost of business insurance?
Paying Monthly Business Insurance Payments
When you start a small business, the chances are that you have better places to invest your money.
For this reason, it’s easy to find yourself running on a tight budget, making it impossible for you to afford annual insurance payments.
When this is the case, then the best option is to go with monthly commercial insurance payments.
Monthly payments can be very convenient but there’s a catch, you’ll be paying more compared to paying annually in one go.
Even with the higher cost, some business owners are more than happy to choose this option since it allows them to spread the cost of insurance coverage over time.
Annual Business Insurance Payments
Paying for your business insurance per year is perhaps the best option as it is less expensive plus it gives you the advantage of getting the bills out of the way allowing you to concentrate on what matters – your business.
Annual insurance payments are suitable for small firms that have income that fluctuates or is seasonal.
Factors That Affect the Cost of Your Business Insurance
Regardless of the route you choose to take for your small business insurance payments, some factors will affect the overall cost.
The most influential factors include:
- The number of employees
- Your coverage needs
- Revenue and size of the business
When starting a business, it’s imperative that you consider all the above factors and also figure out which form of payment best suits your business.
Speak With a Business Insurance Specialist
Starting a business from the ground up is never an easy task.
Therefore, you need to talk to a business insurance expert to make sure you stay on track and choose an insurance payment option that allows you to start your business with success in mind.
For an obligation-free, competitive insurance quote, professional insurance advice or more information on how we can help you, please contact one of our expert consultants today on 1300 356 496 or send a message through our website.
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