How Much Does Business Insurance Cost?
Wondering how much business insurance costs? Well, they vary. Let’s explore what determines your rates.
Small Business Insurance Coverage
Understanding business insurance cost
The amount of premium a small business pays for insurance will vary. That’s because not every business needs the same types of insurance coverage, they operate in different industries, and have different risk factors. Additionally, from company-to-company rates will be different, that because each insurance company use different factors to determine premiums. For this reason, it’s highly recommended that you compare business insurance quotes before you elect to purchase.
What factors determine business insurance cost?
The cost for small business insurance coverage varies based on several commonly used factors. In fact, these factors are used by commercial underwriters to decide if they want to offer coverage, and the amount or premium you’ll be charged for small business insurance. These factors commonly used include:
- Business Industry
Certain industries have higher risks than others. So, you may find your insurance rates reflect that increased risk. For example, construction companies will likely pay more for business insurance coverages than an accounting firm.
- Company Payroll
Costs for certain types of insurance coverage can depend on your business’ payroll. Workers’ compensation, for example, uses payroll as a factor for premium amount.
- Number of Employees
Certain types of business insurance can use the number of your employees as a factor for insurance cost, like general liability insurance.
- Coverage Requested
The amount of coverage you select has an impact on your premium. For example, a small business policy with a $1 million/$2 million aggregate, will generally cost more than a policy with a $1 million/$1 million aggregate.
- Claims History
A business with a clean claims history demonstrates safety and experience. This can result in a lower insurance cost.
There’s a lot to consider when insuring your business, but getting help is easy. Just try to make sure you talk to someone with experience in insuring small businesses. Learn which business insurance coverages you might want to consider for your business.
Can you reduce your business insurance cost?
If finding the cheapest business insurance policy is a must, you need to make sure you find ways that balance your need for coverage and the price you ultimately pay. You don’t want to overpay, and you don’t want to be underinsured. There’s a balance between these competing values, and you need to find it.
To make sure you only buy the coverage you need, analyze your businesses risk first to understand your specific needs. Here are a few other ways you may be able to save in business insurance:
- Bundling insurance policies: You can save money on business insurance by bundling essential coverage into one policy. For instance, a Business Owner’s Policy (BOP) combines business income, commercial property and general liability insurance.
- Pay your entire premium up front: You could pay your premium monthly but paying for the entire total at once can get you a discount on your business insurance coverage.
- Manage your risks: The safer your business is, the less your insurance costs. Create a risk management plan to reduce the likelihood of accidents at your work location, jobsites and on the road.
- Adjust your deductibles: A deductible is the amount you pay out of pocket toward a covered loss at the time of a claim. Generally, the higher your deductible, the lower the cost of your annual premium. Just be sure you’re comfortable paying the deductible you select.
Of course, you have questions. Help take the guesswork out of finding your best small business insurance cost and coverage combination by speaking with a licensed professional. They can walk you through the process and customize a quote specifically for your business. Call us today, or start a quote online. It’s that simple.