It’s not uncommon for a broker or insurance company to offer monthly or annual payment options, and for an existing business, you will be asked to pay the first month of your premium followed by 11 monthly payments. If yours is a new venture, we ask for a down payment of 20% of your premium from the get-go, followed by nine monthly payments. If you miss making a payment (which can happen to anyone), you are provided with a 30-day grace period to catch up without a lapse in your coverage.
There’s also the convenience factor. For instance, if you have a commercial general liability insurance policy that costs $450 per year and you pay $37.50 for it each month, you can automate those payments through your bank account. You’ll know which date each month the withdrawal will happen, can track the payments throughout the year, and comfortably manage your budget. By opting for a monthly payment plan, you are also charged a small administration fee since the insurer must manually process your monthly payments.
Paying Your Insurance Premium Annually
Some small business owners may pay their premium in one annual payment. If you can comfortably afford to do so, there are benefits to taking this route. For starters, there’s the peace of mind knowing you’re covered for 12 months and don’t need to worry about paying for your policy or missing a payment. On the other hand, if you miss a monthly payment, you’ll likely incur a late payment fee.
It also eases the administrative burden on the insurer to process your premium. Since they don’t have to manually manage monthly payments, they won’t charge you a small administrative fee, which is usually the case if you pay monthly.
Making the Right Decision That Suits Your Budget
Ultimately, the decision you make depends entirely on your business’s finances. By paying your premium as one lump sum and avoiding monthly financing fees, determine how much you’ll save. For instance, if paying annually will save you a few hundred dollars, and paying upfront won’t cause any financial strain, it may be the best way to go. But there’s nothing wrong with paying a premium monthly since it breaks up the cost into manageable amounts throughout the policy term. Furthermore, some insurers may offer semi-annual and quarterly premium payment options.
Have a conversation with one of our licensed brokers about which option may be best for you when you’re initiating a new policy or renewing an existing one. It’s worth mentioning Zensurance does not charge its customers any fees for purchasing a policy through us, whether for payment processing, account maintenance, or getting a certificate of insurance. Instead, when you buy a small business insurance policy of any type through Zensurance, we receive a small commission from the insurance company underwriting your policy.
Fill out our online application for the type of coverage you need, get a free quote, and let us find you the right amount of protection you need at the cheapest premium available through our partner network of more than 50 insurance companies. You know your business, and we know business insurance.