If you are a business owner, having insurance coverage is one of the best things you can do to protect your business. There are different types of business insurance coverage that you can take out, from general liability to commercial property. However, before your insurance provider draws the policy, there are several factors that they will consider.
If you are a first-time business owner with operations on a commercial property, here are the most common factors that affect your premium.
1. Location. One of the first things that the insurance company will evaluate is the location of your business property. They will assess your exposure to environmental risks like flooding, as well as the crime rate in the neighborhood where your business is located. If these premises are present on your business location, your business insurance provider may see them as high-risk factors that increase your chances of filing a claim.
2. Size and Age of Property. In a nutshell, the bigger the property, the more there is to insure. And if the building is old and lacks the structural and utility upgrades usually found in modern properties, it could be deemed as being more prone to damage. Hence, you are more likely to file an insurance claim.
3. Type and Age of Equipment. Large, industrial-type equipment costs more to cover than small, portable equipment. Plus, if the equipment is old, they may be more likely to break down, and could be harder to repair because parts may no longer be available. In which case, your premium may significantly increase. Equipment usage may also be taken into consideration by your insurance provider.
The thing to remember about insurance providers is that they determine premium rates based on your likelihood of filing a claim—which in turn is determined by factors like those mentioned above.
If you wish to learn more about different factors that affect business insurance premiums, please call Breathe Easy Insurance at 866.822.7755 or get a free quote.