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Commercial insurance is a necessary expense for businesses that can prevent financial ruin in the face of hardships. Insurance companies calculate the rates for commercial policies much like they do for personal ones. They’ll assess the company’s risk of needing to file a claim based on its industry and history of past claims. Naturally, certain industries are known for higher rates than others, and understanding why this occurs can help you plan to purchase your next policy.
Transportation
When a person spends vast amounts of time on the road, the risk of having an accident increases. The transportation industry revolves around having fleets of vehicles that are all at risk for potentially experiencing an accident. If vehicles in a company’s fleet are damaged, the insurance claims are also impacted by the rising cost of auto repairs, which may be even higher for specialty trucks. Companies can do their part to get lower rates on insurance by focusing on driver training, deterring distracted driving, and keeping their vehicles maintained to pass safety inspections.
Services
The service industry includes many types of businesses, and each one has different factors that may cause higher rates. For instance, banks and communications businesses may need higher levels of liability insurance along with specialty policies designed to manage cybersecurity issues. Most businesses in the service industry rely on liability insurance to protect them from claims that may arise from serving many different types of customers.
Construction
The construction business combines the risks of the transportation and service industries, which can add up to higher premiums. Due to the hazardous equipment and sometimes dangerous working conditions for employees, construction businesses must maintain high levels of liability coverage. Car insurance that covers property damage is also at the top of the list for construction companies to purchase.
Manufacturing
A business in the manufacturing industry makes products that often go directly into the homes and businesses of the people who use them. This increases the risk of having people file claims against a company for malfunctioning products that cause personal injuries or property damage. Insurance companies typically look at the products a company manufactures to assess the risk of lawsuits and claims. Making sure every product goes through a quality assurance process can reduce claims and lower insurance rates.
Real Estate
Companies that operate within the real estate industry usually require several types of commercial insurance. Property insurance rates may be higher due to the rising cost of building materials, but having strong security and fire mitigation systems in place may lower the cost of a policy. Auto insurance is also necessary for businesses that have fleets of vehicles, and liability coverage is a must, since anyone who visits a property may be eligible to file a claim if he or she sustains an injury on the premises.
Business owners need to make sure they protect their companies, employees, and customers by purchasing the right insurance coverage. For affordable, reliable commercial insurance as well as homeowners, renters, motorcycle, and auto insurance, Chula Vista businesspeople and residents should call on the trustworthy professionals at Altra Insurance Services. Reach out to us today to learn how we can satisfy all your insurance needs.