Being informed about key insurance terms can save you time and money when shopping for commercial insurance.
Similar to other specialized industries, small business insurance has unique words and phrases that might be unfamiliar to business owners exploring commercial insurance options for the first time.
Three words that you’ll regularly encounter with most insurance policies are: premium, limits, and deductible. You’ll come across them when you buy almost any form of insurance.
Knowing their meaning will help you be a more informed shopper and save you time and money. Learn more about the definition of each word:
Premium
A premium is the price you pay for insurance. If you want a continuous safety net, always pay your premium when it is due – typically monthly, quarterly, semiannually, or annually. Oftentimes, insurers will offer a discount to business owners who pay their entire premium when a policy is initiated.
If you wish to protect your business, it’s important to pay your insurance premiums on time.
If you don’t pay your premium, your insurer will eventually cancel your policy (or in insurance lingo, your policy will lapse). Once you miss a premium, you will have a grace period to make a payment. If you still don’t pay, your policy will expire, leaving you vulnerable to future losses. If you wish to protect your business, it’s important to pay your insurance premiums on time.
