Each business insurance policy is different, so the cost will vary from company to company. General liability insurance cost is based on the way your small business operates and what policy limits you have in place. On average the median annual cost of small business insurance is roughly $600. Your ending premium cost will depend on how you need your companies policy constructed.
Beyond the way your policy is created, the company type will weigh heavily in total cost of the policy. If you have a high risk business more than likely you will have higher small business insurance rates. On the flip side if you have a lower risk company, you will probably have lower business insurance premiums.
How are business insurance premiums calculated
The cost of your business insurance is determined by various factors. Risk, industry type, history, location of the business, and how long the company has been around are a few of those factors. We go over a few of the more common examples in more detail below;
How long has your company been around; The years you have been in business will play a part in how much your small business insurance is. Very well established small businesses with constant revenue increases may have a low business insurance premium.
Where is your company located; If your small business is located in an area with high theft rates and a history of break-ins, you might experience higher small business insurance rates. If you run a home based business in a low risk area, more than likely rates will be lower. For the most part insurance rates are based off risk factors. If something looks to be a high risk statistically, it probably comes at a higher cost as well.
What is the loss history of your business; Companies that show high loss ratios will usually see higher costs in their business insurance. If your business shows lower loss ratios than other businesses in your industry, you will probably get lower business insurance rates as well.
The type industry of your business is in, is one of the top risks the insurance company will look at; If you operate a high risk business, your small business insurance rates will be higher than if you ran a low risk business. For example if you owned a hazardous waste plant more than likely you will have a higher insurance premium than your friend who owns an IT company.
Are there other ways my business insurance premium can be affected
There are several ways your business insurance premiums can be impacted. Making sure you run a safe up to code business is of the utmost importance. Keeping your business safe will only help to positively affect the ending outcome. There are factors we should keep in mind with regards to business insurance. Here are some of the key points the insurance company may look at;
The number of employees you have on staff will play a factor. If you have 1,000 employees your company is usually a higher risk than a company with one employee. Although, if you have 1,000 home based employees versus 2 employees that work primarily around heavy equipment, the number of employees may not play as much of a role.
The amount of salary you pay out. When you pay out more in salary you take on higher risk due to it being higher amounts of funds moving around. More money, more problems.
The day to day operations will make an impact. If you have a construction business you will probably have higher rates than your friend who is a notary. The risk of the activity of your employees and yourself will impact your business insurance rates.
The Classification of the business you own. Is it a corporation or a sole proprietorship. This may play a role in how much you pay for your business insurance.
The type of goods and services you provide. If the products you provide are of a higher risk than normal, you will probably encounter higher business insurance premiums. However, if you sell a low risk product, you will more than likely have lower small business insurance rates.
The valuables you keep within your business will play a factor in your business insurance rates. If you have items of high value at the business location you would need to cover the value of those items. For example if at your business location you have expensive computer equipment or high value vehicles, the cost of those particular assets would have to be covered. Which in turn will create a higher rate on your business insurance.
What do your companies sales reports look like? Believe it or not this can play a role in what your business insurance rates will be. If you show consistent gains in profit you could be looking at better rates on your business insurance as well. However, if you have experienced decreases in production you may be looking at higher rates on your business insurance premiums.
So how much is my business insurance premium going to cost me?
If we took our average business insurance premium of $600 annually, we’d be looking at rough costs of $50 per month to protect your business. Please keep in mind these are very rough figures and we are taking into consideration a very wide range of policy types. Like we mentioned above business insurance rates are determined by many factors. Your rate will differ from the next persons business insurance policy.
The agents at Eugene C Yates Insurance Agency can walk you through all of your options. What’s awesome about going through a reputable insurance agent is they will have access to the top insurance companies in the industry. You aren’t bottle necked into one choice. You will have the best business insurance options for your individual situation.
To secure great business insurance rates is easy with our agents. All you have to do is give us a call and we will walk you through everything else. We can answer any questions you may have as well! [click here to call an agent now]