As a business owner, you need to protect your business with insurance. The insurance covers various risks, including accidents, fires, theft, and lawsuits. However, one significant factor to consider when purchasing business insurance is the premium cost. If you want to know how much you'll pay for your premium, here are the factors influencing the commercial insurance premium cost.
Coverage The different types of business insurance coverage include:
- Income insurance. Replaces income loss when you close temporarily due to covered losses like property damages. Also, the coverage can cater to property repair or replacement expenses.
- Property coverage. Safeguards your buildings, equipment, and other property on the business premise.
- Data Breach coverage. This safeguards your business against the costs of cyberattacks. For instance, you have to put resources into finding the breach, mitigating the damages caused by the risks, and communicating to affected parties.
- Workers' compensation. Covers employees that can't work due to work-related injuries.
- Commercial umbrella coverage. Protects your business when other coverages exhaust their limits.
Each coverage type has a unique cost which affects the premium amount. For instance, business umbrella insurance usually costs more than property damage, which means higher premium costs. However, your insurance provider should guide you on selecting the ideal coverage within your premium expenses budget.
Ideally, businesses such as construction or manufacturing attract higher premium costs due to increased incident risks. In contrast, businesses such as massage parlors aren't as risky, resulting in lower premium costs.
Business Premise Condition
Insurers usually inspect your building to know the condition of the features. If the building is in perfect condition, that lowers the risk of damages hence reduced repair costs. This may attract a lower premium. On the contrary, poorly maintained buildings attract higher premiums since they may require frequent repairs.
Location, Value, and Age of the Commercial Building
If your commercial building is in a location with a high crime rate or an area prone to natural disasters, you will pay a high premium. Additionally, the higher the value of the construction materials, the higher the premiums you'll pay. Older buildings also attract higher premiums.
Insurers always want to know the number of claims you have made in the past. If the claims are many, the insurer is likely to pay more damages, which attracts higher premiums.
The common factors that influence the cost of your business insurance include coverage type, business type, claims history, business premise condition, and the age, location, and value of the business premise. Understanding these factors will help you estimate your premium costs and create a reasonable budget.
For more information on business insurance, contact a specialist in Boston, MA.