Budget for Premiums
Insurance premiums should always be included in the budget of a business. Fortunately, budgeting for insurance premiums is a fairly easy process. Of course, whenever you're seeking business insurance quotes, you should always make sure to confirm how long the premiums will stay at the stated rates.
The best way for a business to budget for premiums is to first write out a list of all its insurance and premiums. Then, list exactly when the premiums are due, and create a schedule for their payment. It is usually best to do this before budgeting for other business expenses.
Anybody unsure of the amount of their premiums should contact their insurance agency for that information before creating their budget. Insurance professionals should know what premiums will be for the upcoming year.
The best time to get business insurance quotes and budget for the coming year is usually in December, when business owners have learned precisely what the costs will be.
Many business insurance companies give customers a choice of the kind of payment that they will make: monthly, quarterly, or annually.
A quarterly payment is made every three months; it can make life easier because a person wont have to budget for a new payment every month. The only drawback is that the business must have enough money available to make the quarterly payment.
An annual payment is a large lump-sum premium paid once a year. It can reduce paperwork, but it can also be quite costly. Some kinds of business insurance, including life insurance policies for business executives, require an annual payment.
Cover Increases of Premiums
It is always a good idea to budget an amount for insurance that slightly exceeds the premiums in your the business insurance quote. This way a business can have some extra funds available to cover unexpected increases in premiums and other funds wont have to be used for insurance.
Business owners should keep a careful record of insurance costs because insurance is tax deductible. Always keep records of the premiums and the checks or electronic funds transfers used to pay them.
If a business has a lot of insurance costs, it might be a good idea to have a separate checking account to pay insurance premiums out of. This can make bookkeeping and budgeting for insurance much easier.
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