Purchasing insurance for your company is necessary because it can protect your employees as well as your products and services. However, the cost of the protection may be expensive, depending on your budget and the type of coverage you choose. Below are some of the reasons business insurance can be more costly than average and your options in these situations.
Type of Coverage
When you’re choosing a policy, the premium cost is often determined by the type of coverage you request, ranging from general liability to bodily injury, property damage, and more. The type of assets you want to protect will also affect the price range. Your policy should be customized according to your budget, but it’s best to cover the things that matter most to your company, such as office space, electronics, and employees.
The area your business is located in often determines whether your insurance is more expensive or cheaper than coverage for similar companies in different states or cities. For example, suppose you choose to open your store in an area with a high risk of flooding. In that case, the insurance is typically more costly than it is in areas with minimal weather problems. You’ll need to discuss these issues with your provider before agreeing to the terms and premium costs. The provider may offer discounts and other deals to offset the higher pricing in some instances.
Type of Industry
Although most companies can use everyday situations to estimate the costs associated with operating their businesses, some factors can cause insurance prices to be higher or lower, depending on the industry. For example, opening a restaurant could lead to higher business insurance costs than opening a boutique store in a small town. While both companies sell products and offer customer service, the risks associated with the industries aren’t the same. With the restaurant, a consumer could become ill based on the temperature of the food or some of its ingredients, which isn’t the same as purchasing a pair of earrings, a scarf, a pair of pants, or other clothing and accessories from a fashion boutique. Speak with an insurance provider directly to ensure you get accurate pricing for business coverage.
Previous Claim History
If your business isn’t new and has a prior insurance policy, most providers will look at your past claim history before offering coverage. Some of the claims you’ve made will be a significant factor in your premium pricing. If you have an excessive number of claims, you could be considered a high risk and be denied coverage. However, the provider might offer an expensive policy as protection in case you file numerous claims in the future. Other factors that could determine your new premium are the type of business you operate and how your employees fit in. For example, if your restaurant offers delivery to customers, the driving records of your employees could be reviewed by insurance providers and affect your premium amount.
Business owners need to make sure they protect their companies and employees by purchasing the right insurance coverage. For affordable, reliable business insurance as well as homeowners, renters, motorcycle, and auto insurance, San Diego residents should call on the trustworthy professionals at Altra Insurance Services. Reach out to us today at (800) 719-9972 learn how we can satisfy all your insurance needs.