Insurance companies base insurance premiums on statistical and specific evaluated risks. As the risks associated with insuring a particular activity, item or individual increase, so do the premiums charged. Of course, there are steps you can take to minimize your insurance costs.

• Obtain at least three quotes for each type of insurance you need and analyze each for the range of coverage, cost/protection value and reputation of the agent, broker and insurance underwriter. But remember: the lowest cost certainly does not necessarily mean the best coverage. However much you might save, if a policy does not properly meet your specific needs, it is not worth the savings.
• Contact local business associations. Most home business associations have business insurance programs in place for members at a much lower cost because of volume purchasing. Often the savings will pay for the price of membership.
• Contact your current insurance broker and inquire about special home business riders. The popularity of home business has increased so much in the past decade that many insurance companies now offer their policy holders home business rider options, which can be tagged onto their homeowners policies for less than the cost of separate home business policies.
• Consider raising your claims deductible, the portion of any insurance claim you pay before the insurance coverage pays the balance. As a rule of thumb, the higher your deductible, the lower your premiums. But do not make your deductible so high you would not be able to pay it in the event of a misadventure.
• Get creative and find out if there is an insurance agent or broker in one of the local business or barter clubs who would be willing to accept your products or services in exchange for decreasing or eliminating the cost of insuring your home business.
• Take the logical approach to home business insurance and prioritize your true insurance needs. You can add or increase insurance coverage as your business grows and you become able to pay higher premiums.

Start with the basic plans that will deliver the best protection for your family and clients now and then increase your insurance coverage as your means allow.

You can use the Insurance Coverage Worksheet to determine if you need specific insurance coverage for your home business and the costs associated with each type. In some cases, more than one insurance policy will be required to protect employees, partners or family members. In other cases, insurance policies may overlap in their coverage and you won’t need quite as many as you think. By using riders and buying various umbrella policies, you may be able to save money.