Starting your own business and seeing your ideas take off is awfully encouraging; however, there are many hiccups you'll have to overcome in the beginning. 8 out of 10 small businesses will fail within 18 months of getting started. While there are many factors contributing to this, not learning how to properly manage expenses can cause your business to take a big hit. You should try to lower annual overhead costs – especially when your business is still stabilizing. If your business relies on a commercial vehicle, here are 5 ways you can save on commercial auto insurance.
Opt for a Longer Insurance Contract
Paying for commercial auto insurance month by month may help you break down the payments into smaller amounts; however, chances are you will be paying a lot more annually. If you definitely need the car around, opt for a longer insurance contract. Although you'll be paying a larger amount initially, you'll be saving a lot of money each month for the same amount of coverage.
Pay for the Costs Upfront
Most insurance companies can set-up affordable payment plans with you; however, do keep in mind you'll be charged more service fees in the long run. Some insurance companies will even negotiate better premiums with you if you're willing to pay for everything upfront. Don't hesitate to ask.
Bundle Commercial Auto Insurance with Other Business Insurance Policies
When starting a business, you'll be spending a lot of money on insurance like general liability insurance, property insurance, professional liability insurance and worker's compensation. Don't buy insurance from separate companies. Instead, bundle it all up, and the insurance company will kick back some savings to you. You'll also get better coverage on all of the policies. It's a win-win situation for both parties.
Be Wary of Who You Cover
Just because there is a company car doesn't mean everyone should have access to it. If the company car is for making deliveries or for picking up clients, review driving records of all employees to see whether they have been responsible in the past. You should be wary of who you cover and can save a lot of money if you don't cast the net far. Instead, limit access of the company car to experienced drivers with a lot of history on the road.
By avoiding high-risk or young drivers, you could help your company save a lot on commercial auto insurance because there is a lower risk of accidents happening on the road.
Some insurance companies will request for you to send identification documents of all of the employees who are permitted to drive the vehicle. To prevent any mishaps from happening, be careful when you give the car keys away.
Consider the Type of Coverage Needed
Last but not least, consider the type and amount of coverage your company needs. For example, while you definitely need liability coverage, you may not need collision coverage if the company car is rather old and you have no interest in repairing the vehicle should it be involved in an accident. The amount of coverage needed should also be taken into consideration. You need to be aware of your state's requirements.
If you're looking to lower annual overhead costs, speak with an experienced insurance broker regarding what you can do. Most of the time, companies tend to purchase more coverage than what is needed or insure everyone in their companies when that's not really necessary. While it's crucial that the company car is insured properly, you don't want to spend a huge chunk of your capital on insurance, as you will not yielding any return on these expenses. For more information, contact a local commercial vehicle insurance company.