Many businesses, regardless of size, require some form of insurance. Ideally, coverage can help shield you from certain risks like lawsuits and financial loss. Some elements can affect the overall pricing when your insurer calculates your premiums. Here are four factors that affect commercial insurance costs.
1. Your Industry
The insurance costs you pay will depend on the business you're operating. For instance, you might pay more if you're in the construction, cleaning, or manufacturing industries. Typically, your workers may be exposed to hazards in such working environments. For example, a janitor can slip and injure themselves, meaning you need liability coverage. The costs can be higher because your industry is prone to these dangers. If you are in the security sector, your staff can also be susceptible to injuries, increasing your premiums.
2. Claims History
Your company's claims history can affect rates in the future. If your organization has filed multiple claims in the past, your premiums may be high. Additionally, if you've faced many lawsuits, an insurer can view this as a trend and charge costly payments. On the other hand, if your claims records are few, you can enjoy low rates. At this point, you might be a low-risk business.
3. Annual Income
A thriving business might need more coverage than a struggling one since it requires to protect its assets. If your company's annual income is high, the premiums can increase. Additionally, lucrative sales can be a sign you have many customers who need coverage. In that regard, your chances of getting sued might be high. Your insurer can quote high premiums to cover settlement costs when your yearly income is impressive.
4. Business Size
A bigger business might own more property that needs the utmost protection. Therefore, you may pay more to insure your property adequately. What's more, large companies might have many employees compared to small businesses. On that account, many workers may mean your company may file more claims. Your premiums may be expensive to cater for medical payments after injuries. The money can also go towards settling lost income and funeral expenses. On the other hand, small companies may enjoy lower rates until they grow in size.
The above factors can affect your commercial insurance costs. Bear in mind that the pricing might also differ depending on your location and the insurance company. You can do some homework before paying the premiums to settle on the best carrier for your unique needs.
For more information, contact a local company like United Counties Insurance Group.Share