How much does small business insurance cost?
Are you starting a new business and wondering “How much does business insurance cost?” Small business insurance will vary depending on the type of business you are starting.
Factors That Can Affect the Cost of Small Business Insurance
Each business is unique and has different risks. Some factors that determine the cost of your small business insurance include your company’s:
Size
The more customers you have, the more risk you face for claims.
Experience
As you gain experience in your industry the less likely you are to have a claim.
Industry
Certain industries are riskier than others. You may find that your insurance rate reflects those risk factors. For example, a construction company faces more risk than an accounting firm.
Number of employees
Certain types of business insurance use the number of employees to factor your insurance cost, like general liability insurance.
Claims history
Businesses with a clean claim history demonstrate safety and experience. This will most likely result in a lower insurance cost.
Payroll
Certain types of business insurance use your company’s payroll to determine the cost. For example, workers’ compensation uses payroll to factor the cost of the policy.
Location
More populated areas can increase the risk of a customer injuring themselves.
Cost Factors for General Liability Insurance
Factors that carriers us to determine your general liability insurance cost include:
Sales
The more customers you have, the more risk you have for claims which can increase your cost.
Industry
The more hazardous the type of work you do the higher the cost.
Location
The risk of customer injury increases in higher populated areas, so this can increase your rate.
Cost Factors for Professional Liability Insurance
Professional liability insurance which can sometimes be referred to has error and omissions, helps protect your business if you make a mistake or error in the professional advice given. Some of the cost factors for this coverage are:
Number of employees
Businesses with more employees will often pay higher premiums for this coverage.
Exposure to risk
Businesses offering higher priced services or that handle high value assets or sensitive information, in most cases will pay more for professional liability coverage.
Cost Factors for Workers’ Compensation Insurance
A workers compensation policy protects your employees if they get a work-related illness or injury. Some factors that contribute to the cost of workers compensation insurance are:
Type of work
Some work puts employees at a higher risk for injury or illness and therefore are more expensive to insure.
Claims History
If you’re operating a safe workplace the less likely you are to have a claim. If you have only a few workers compensation claims this can lower the cost of your premium.
Payroll
The cost of the work comp is calculated per $100 of payroll. The higher your payroll, the higher your cost for workers compensation.
Cost factors for Commercial Auto Insurance
A commercial auto policy can protect you and your employees when you’re driving a company owned vehicle for business. Some of the factors that carriers use to determine the cost is:
Where and how often you drive
The chances of an accident increase the more time you or your employees spend on the road which can increase your commercial insurance cost.
Driver demographics
Less experienced drivers are more likely to have an accident and therefore are more expensive to insure.
Type of vehicle
Commercial insurance rates will vary based on the type, make and model of the vehicles. Typically, more expensive vehicles will have higher premiums on a commercial insurance policy.
Driving record
The better the driving record you and your employees have the lower the insurance premium will be.
Coverage
The higher coverage limits you have the more you will pay for your policy.
The nature of your work
The type of service you provide does affect the premium.
How to lower the cost of your Small Business Insurance
The best way to lower your small business cost is to reduce your risks. However, there are a few other ways to save o the cost of your small business insurance.
Bundle your insurance policies
You can save money by bundling your policies. One way to do this is to get a business owners policy which combines your general liability, commercial property, and business income insurance into one policy.
Pay your full premium up front
Some carriers give you a paid in full discount. Instead of paying your policy monthly pay the full annual premium to get a discount on your small business insurance policy.
Manage your risks
Manage your risk by creating a risk management plan to reduce the likelihood of accidents on jobsites, at your business location, and on the road. The safer your business is the less you will pay for your insurance.
How much Is Small Business Insurance?
To find out how much small business insurance may cost you, get insurance quotes from us today. Click here to get a quote.