These 4 Factors Affect How Much You'll Pay For Business Insurance!

So, you’ve started a small business and you want to make sure it is protected with insurance. How much will that cost you? That depends on these 4 factors:

1. What you do/sell How much you pay for insurance depends on what type of business you run. The higher the risk, the more you’ll have to pay. For example, construction workers and manufacturers often have some of the highest rates for general liability insurance, because they deal with (and could potentially damage) other people’s property.

Your liability risk matters as well. For instance, the risk of incurring liability for physical injury to third parties is likely greater for a business that performs security services than for a business selling clothes.

2. Where you operate your business High-hazard flood zones obviously would have greater risks for property damage than in places where weather-related incidents are less likely to occur, and insurance premiums often reflect the different level of risk.

You can take certain steps to reduce risk for property damage, but if your business is located in a high-hazard area, the cost of your property insurance is likely to be higher than it might be in other locations. 3. Whether or not you own your space Do you own a building for your business, or do you rent a space? Each of these situations has its own risks, and it depends on the type of business you run. For example, if you rent space for a restaurant, you’ll likely pay more property insurance premium than if you run an office business from a rented space because the risk exposures from restaurant equipment are greater than risk exposures in a general office environment.

If you own the space for your restaurant, you're also likely to pay more for property insurance premiums than if you rent, because your coverage will typically insure against damage to the building itself and not just the contents inside.

4. Your history of prior claims Insurance companies will also look at your claims history, if you have any. For example, if you’ve been sued for mistakes you’ve made in providing services, an insurer may consider this a trend that will continue and charge a higher premium for the increased risk presented.