When it comes to business insurance, many business owners are drawn to the cheapest option. On the surface, it makes sense: why pay more when you can tick the insurance box for less? But in our experience at Baldersons Insurance, going for the cheapest policy often ends up being a costly mistake.
Here’s the truth about cheap business insurance and what you’re really getting when you pay less.
What Does “Cheap Insurance” Usually Mean?
Cheap business insurance often comes with:
- Lower levels of cover – You may not be fully protected in the event of a claim.
- Higher excesses – You’ll have to pay more out of pocket before your insurer contributes.
- Limited support and service – Cheaper providers often cut corners in claims handling and customer service.
- Exclusions buried in the small print – Many budget policies exclude crucial elements you might assume are included.
It’s not about being over-insured or overspending—it’s about having the right cover for your specific business risks.
Real-Life Example: The Hidden Cost of Going Cheap
A café owner chooses the cheapest insurance policy online. It looks like it ticks all the boxes—until a fire damages the premises. The policy only covers a fraction of the repair costs, and there’s no business interruption cover to help with lost income while the café is closed. The result? Months of financial strain and a hard lesson learned.
At Baldersons, we’ve worked with businesses picking up the pieces after cheap policies failed them when it mattered most.
The Risks of Underinsurance
Choosing a low-cost policy often means settling for lower limits of indemnity. In a major claim, this can leave you thousands of pounds short. For example:
- Public Liability Insurance with inadequate cover can leave you liable for injury or damage claims.
- Professional Indemnity Insurance with low limits may not cover legal costs and compensation.
- Property Insurance with inaccurate valuations can delay or reduce claim payments.
In each case, you may be legally and financially exposed—even though you thought you were insured.
What to Look for Instead
Rather than focusing solely on price, ask yourself:
- Is the policy tailored to my business activities and risks?
- What does the policy actually cover—and what doesn’t it cover?
- What level of service and claims support will I receive?
A reputable broker like Baldersons Insurance can help you assess your needs and compare policies based on value, not just price.
How to Avoid Being Under-Insured
- Work with a broker – We know what to look for and which questions to ask.
- Review your policy annually – As your business evolves, so should your insurance.
- Don’t be afraid to ask for clarity – A good broker will walk you through the fine print.
Cheap business insurance can be a false economy. What you save in premiums could cost you much more in the long run if the cover doesn’t perform when it’s needed most.
At Baldersons Insurance, we help businesses strike the right balance between cost and coverage. We don’t push expensive policies—you’ll only ever get recommendations that match your actual needs. If you want insurance that protects—not just pretends—get in touch with our expert team today.
