A career as a contractor can be very rewarding and also include a lucrative income. But, as a contractor, you need to make sure that you are financially protected--one major lawsuit could wipe out your business and leave you broke. The simple way to protect yourself as a contractor is by carrying the proper insurance policies. In addition to providing financial protection, most states also require licensed contractors to be fully insured. While contractor insurance may be a necessity, that doesn't mean that you should spend more money on premiums than you have to. Use the following tips to help you save money on your contractor insurance policies:
Bundle Your Policies
As a contractor, you will need to carry several different types of insurance, including commercial general liability, worker's compensation, and commercial auto. If you want to save some money and reduce the cost of your insurance premiums, look into bundling your insurance policies. Bundling your insurance policies means that you purchase all of your policies from one insurance company. Most insurance companies offer a substantial discount for a company that has multiple insurance policies. Over time, bundling your contractor insurance policies can add up to big savings.
Increase Your Deductible
Just like any other type of insurance policy, if your contractor insurance policies have very low deductibles, you will pay much higher premiums. A really easy way to save money on your contractor insurance policies is by increasing your deductibles. Ideally, you should opt for the highest deductibles that you can comfortably afford. A good rule of thumb is to set aside the deductible amount for each policy that you carry and keep those funds in a separate account, so they are always available should you need to file a claim. Choosing high deductibles makes even more sense if you have not had to file any claims over the last few years.
One big mistake that contractors make is purchasing the necessary insurance policies and then keeping them for years without reviewing the cost or looking into other options. The cost of commercial insurance policies can vary greatly from one insurance company to another, so if you're looking for lower premiums, it is in your best interest to shop around. If you have had the same insurance policies for an extended amount of time, it is well worth the time and effort to contact a commercial insurance broker to see if it is possible to purchase new policies that provide the same coverage at a lower price.