As a tradie, you’ve probably heard or even experienced plenty of horror stories about people accepting the lowest quote for their work and later regretting it. But do you do the same when it comes to your sole trader insurance?
Although you might be looking to save some money, sometimes the cheapest insurance option might not offer the right protection. Whether you’re a tradie taking out new policies or are about to renew your current ones, here are 6 tips to help you choose the best option for your small business.
It’s often hard to know if you’re getting a good deal on insurance, especially if your business is just starting. Knowing what questions to ask and where to find the answers could help you find the right cover for your business.
1. Direct isn’t always best
It’s natural to assume that if you go directly to a major insurance company’s website you will get the cheapest prices. This may be how you found your home or car insurance—requested a selection of quotes from big companies and took the cheapest.
However, accessing insurance for tradies can be more complicated and receiving multiple quotes to compare is often important to ensure the most appropriate cover and competitive price for your business. Firstly, not all insurers have the same “risk appetite”. This means that whilst one insurer may think carpenters are a good risk, the next insurer may think they are a bad risk, and both will price their policies accordingly. For this reason, it is a good idea to get a few quotes to compare policy terms and conditions and prices. In addition, not all insurers deal directly with businesses, so by only talking to those that do you may be missing out on the policy that is right for your business.
2. Use an Online Insurance Service
Your business probably keeps you very busy. It might seem like there just aren’t enough hours in the day to find the best insurance policies and keep up with everything else you need to do. This is where using an insurance service can help.
An online insurance service can save you a considerable amount of time as they do the comparison for you and can also save you money. An insurance service will work with a range of insurers, including those who don’t deal directly with the public, and will be able to provide you with multiple quotes instantly from their insurer partners.
3. Pay yearly, not monthly
Whichever way you decide to purchase your insurance –making payments by the month will usually be more expensive.
If you have the money to pay your insurance in one lump sum, you will usually make a savings. If your business has a tight cash flow situation, it may not be possible or desirable to put down a lump sum for the whole year. But if you can comfortably swing it, making a single yearly payment could translate into a saving.
4. Buy in packages
Tradies often need or want several types of insurance to protect their small business. Instead of taking out separate policies to cover the most common risks, you could save money by buying an insurance package instead.
Tradies commonly take out Portable Equipment and Public Liability. They may also consider other policies, such as Personal Accident and Illness or Tax Audit. In some cases, combining these different types of insurance into a single policy could save you money.
If you’ve already got a policy and are renewing
5. Tell your provider if your business size changes
Several forms of business insurance, including Public Liability, have pricing that is partly affected by a business’ size. This can be measured by the number of staff you employ, your annual turnover, or both. If your small business has experienced major changes to either of these, you should let your provider know.
6. Tell your provider if your operations change
Another factor that insurance companies use to calculate insurance premiums is the work that you do. This is more than your specific trade; it’s the work you do within it. For example, a plumber who only works on domestic water supply and one who mends heating pipes at a power station will have considerably different levels of risk and thus attract different premiums.
If you are anticipating a change to your operations, let your provider know. They may be able to offer you lower premiums if you are taking on less risky projects. On the other hand, make sure your provider knows if you are going to be taking on riskier work in the next insurance period. It might cost you more in premiums, but if you don’t let them know you may find that any claims related to the higher-risk work may not be covered.
Small business insurance is important to people working in any industry, including tradies. Finding ways to save on your policies could help you stretch your budget while protecting your growing business. Start comparing business insurance for tradies from a great range of trusted leading insurers with BizCover. Experience insurance made easy today.
* This information is a general guide only and does not take into account your objectives, financial situation or needs. As with any insurance, cover will be subject to the terms, conditions and exclusions contained in the policy wording. The information contained on this web page is general only and should not be relied upon as advice.