6 Ways to Lower Grocery Store Insurance Premiums

Finding good grocery store insurance requires balancing coverage needs with premium costs. However, achieving that balance becomes quite complicated because grocery stores are inherently risky businesses and can face situations such as food spoilage, liabilities, and equipment breakdowns. The good news is that with a little know-how, you can find an affordable policy without sacrificing important coverages.

1. Look for New Coverage Options

As a grocer, you know how shopping around for the best prices can save customers on their food bill. Insurance is similar—looking for new coverage options every few years can yield significant savings over the course of a policy.

The easiest way to shop around for insurance is to work with an independent insurance agent, preferably one who specializes in grocery store insurance. Agents who work with one particular insurance company must favor that company. Independent agents aren’t obligated to push you toward any one insurance company. They can recommend the best policy based on coverages and premiums, regardless of which company is underwriting it.

2. Invest in a Business Owner’s Policy

Think of a business owner’s policy as a quantity discount—you save more as you bundle multiple coverages into a single policy.

A business owner’s policy (BOP) is a package that bundles several common commercial coverages together. The core coverages in a BOP are usually general liability, commercial property, and business interruption insurance, but you can often add on other protections.

If there isn’t a BOP that offers all the options your store needs, a commercial package policy (CPP) is another option. These are more advanced commercial insurance policies, sometimes offering even greater coverage options.

3. Opt for a Higher Deductible

Selecting a higher deductible means your store accepts more risk. However, the amount of additional risk is limited, and the trade-off can be much lower monthly premiums.

A deductible is how much your store pays out of pocket before the insurance policy begins paying. For example, assume you have a claim of $15,000 and a $2,500 deductible. Your store would have to pay the first $2,500, and the policy would pay $12,500.

In many cases, insurance companies offer steep discounts for increasing your deductible. This can be an obvious way to save on premiums if your store has some savings that it could draw from.

4. Re-Evaluate Your Plan Every Year

Insurance isn’t a “get it and forget it” purchase. Business changes can necessitate coverage changes, and insurance policies often adopt slightly different terms when they renew. What’s more, premiums change from year to year.

A best practice is to re-evaluate your insurance plan annually. Consider whether its coverages still meet your store’s needs, and shop around to determine if there’s another policy with similar coverages and lower premiums. Again, the easiest way to do this is with an independent agent.

5. Prevent Claims by Investing in Risk Management

One of the most effective ways to keep premiums low over the long term is to prevent claims from happening in the first place. Insurance companies consider how many claims a business has filed in the past few years, and failing to file any will result in lower rates.

While you can’t prevent all unforeseen potential claims, investing in risk management lessens the likelihood of a claim. Non-slip floor mats and clear “wet floor” signage reduce the potential liability risk of a customer slip-and-fall injury. Temperature monitors with text alerts could reduce the risk of food spoilage, security alarms deter would-be thieves, and maintaining compliance with OSHA regulations minimizes potential workplace injuries.

6. Join a Risk Retention Group

A risk retention group (RRG) is a liability insurance company owned by its members. Businesses in the same industry, such as grocery stores and supermarkets, can join an RRG to pool their risks and self-insure. This isn’t traditional insurance, but rather similar businesses helping each other if one has a covered emergency.

Advantages can include more tailored coverage, potential dividend distributions if there aren’t many claims, and potentially more stable premiums. Disadvantages vary by program, but beware that RRGs may not cover all types of risks, and they are not protected by state guaranty funds (which many insurance policies are).

Influential Factors That Are Harder to Control

No matter what you do, some factors that affect premiums are difficult to change. Location, number of employees, and annual revenue are a few examples of factors that you have little control over. Focus on what you can control, shop around for a good policy, and don’t worry about what can’t be changed.

Get Professional Advice Today

Allied Insurance Managers has been helping grocers create specialized insurance programs for nearly four decades. Our independent agents will work closely with you to find an affordable and effective option. For Michigan customers, we even have access to a newer program that has been shown to help businesses save up to 45% compared to their current premiums.

Find out what we could do for you by requesting a free quote.