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How to Save on Business Insurance During a Crisis

Chris Porteous
Chris Porteous

Despite the allure of doing away with your insurance entirely, insurance coverage remains critical, especially when it comes to preparing for future crises.

Business owners everywhere are facing new hurdles to success now that a global economic shutdown has left them deprived of customers and workers alike. During these trying times, many entrepreneurs are scrambling to cut costs in as many ways as possible, and this usually includes taking a second look at their insurance plans. Despite the allure of doing away with your insurance entirely, insurance coverage remains critically important, especially when it comes to preparing for future crises. Nevertheless, there are some reliable methods you can rely upon to save on your business insurance during a crisis.

It's possible to secure a refund.

For many business owners who are desperately trying to scrape together some cash to work with right now, it’s very possible to secure a refund from your insurance provider if you qualify. Those business owners who have been diligent insurance customers these past few years will find themselves more likely than most to qualify for a refund, too, as insurance providers are more likely to cut a deal with you if you've been a loyal customer who's been paying what they owe on a consistent basis.

As a matter of fact, insurance refunds are already beginning to flow out towards business owners who find themselves particularly hard-hit by the coronavirus pandemic. According to one report from the Los Angeles Times, for instance, insurance companies across the state of California have been ordered to issue refunds to both business owners and drivers with auto insurance as a direct result of the economic calamity spawned by COVID-19. The state's insurance commissioner ordered that partial refunds should be given out, and in many cases, these refunds can equal up to two months of payments. For drivers and business owners, that cash makes a huge difference.

Some business owners may be concerned to hear about insurance refunds being issued; after all, if insurance providers are mandated to provide refunds to customers, doesn't that also mean they have a reduced obligation to pay up in the event of a disaster? For the most part, no, as there are substantially fewer insurance risks right now with everyone staying home. This means that insurance companies can afford to issue refunds right now, and why local authorities like the insurance commissioner of California are comfortable mandating that they issue such refunds.

There are other ways to secure a refund on your insurance payments, too, and small business owners shouldn't hesitate to overturn any stone until they find the money they need to remain open amidst this crisis.

Have you reduced your workforce?

Business owners that have been forced to reduce their workforce due to COVID-19 could find themselves eligible for a peculiar but effective refund method. This is also helpful if you haven't yet reduced payroll but intend to make some changes to your payroll in the near future as the damage from this crisis truly takes hold. In a nutshell, this rare method to save on your insurance requires you to solicit a "payroll endorsement" from your provider, which you'll have a much greater chance of securing if you've been loyally paying your premiums thus far.

Insurance expert Dennis Dix offers some clarity on how to pursue such an endorsement: "Under certain circumstances, the insurance company may refund a premium already paid," said Dennis. "This is rare, but if you're near the end of your policy period, have already paid the entire premium, and your new estimated annual payroll is lower, you will have overpaid. You will have to request the refund as many carriers prefer to handle these payments at the end of the policy term."

In other words, it pays off to be a loyal insurance customer who's been on top of their premium payments thus far. If you're nearing the end of your policy and are entirely paid off, ensure that you take the time to ask your insurance provider about this option, as it could end up saving you a huge sum of money that your business can't afford to lose right now. There are also more traditional methods for saving money on insurance costs, though these are best relied upon before a crisis hits. In other words, you should start studying up on the methods listed below if you want to be ready for the next economic shock.

Bundle your coverage.

Perhaps the best method for saving money on insurance is to simply bundle your coverage. While this seems obvious to those who are familiar with the ins and outs of the insurance industry, many entrepreneurs who are trying to get their startup running may have little to no experience purchasing commercial insurance. This is why it's important to learn about bundling insurance coverage, as it will ensure that all of your eggs are neatly accounted for in one secure basket. Instead of studying different types of insurance, investing in a business owner's plan can get you a bundle of various coverage options at an affordable price.

The best thing about a business owner's insurance plan is that it often includes rare insurance provisions that could otherwise be incredibly difficult or costly to obtain. Business interruption insurance is sometimes included in business owner plans, for instance, which will ensure your company can get an insurance payout if it sees its business interrupted and halted for any number of reasons.

If you review an extensive list of the various types of business insurance that enterprises have to choose from, it's easy to get overwhelmed. Having too many choices leads to option paralysis. Those business owners with limited insurance experience are particularly likely to become confused and refrain from investing. This is why bundling your insurance options is of the utmost importance, as only by securing a package deal can you simultaneously save money while ensuring you're covering all of your bases. In many instances, business owner plans bundle general liability insurance with workers comp and business interruption coverage. Securing these plans will save you tons of money in the long-term and help you weather future crises. 

Seek discounts, and cut the fat.

Finally, entrepreneurs who are looking to save money on their insurance costs should actively seek discounts while cutting the fat from their insurance plans. Actively seeking discounts actually means actively spending money – this is because paying for your coverage upfront in the insurance industry guarantees you lower rates in the long term. If you and your commercial enterprise have long-term plans for the future, it's worthwhile to spend large sums of money on insurance premiums in the short term to guarantee your policy pays off big in the future.

Cutting the fat is more difficult but can result in similar savings. Cutting the fat effectively entails getting rid of excessive coverage that is a financial burden for your company. Business owners should understand that reducing employee insurance benefits can backfire during a time of crisis, however, as it's incredibly easy to damage your brand reputation by appearing to throw your workers under the bus. If your business is owned by a multitude of individuals, cutting owner benefits may be better for your public optics and wallet alike.

With COVID-19 destroying economic growth everywhere, now is the time to pay attention to your insurance costs. Shop around wisely, bundle your coverage options and solicit refunds from insurance providers, and you can be in better financial condition in no time.

Image Credit: fizkes / Getty Images
Chris Porteous
Chris Porteous Member
I'm a serial entrepreneur and owner of three internet ventures, including My SEO Sucks. A contributor to ZeroHedge,, Forbes,, and dozens of other media outlets, I believe in SEO as a product. I developed a proprietary technology fueling the #1 rankings of My SEO Sucks clients. In guest speaking ventures across North American, I advocate for organic search traffic as the backbone of any comprehensive digital marketing strategy.