How are Commercial Insurance Premiums Calculated?

How are Commercial Insurance Premiums Calculated?

How are Commercial Insurance Premiums Calculated?

These are some of the factors an insurer will take into account when determining your business insurance premiums.

When an insurance company offers your business a quote, they will consider various different factors when determining your rates. As a business owner, it’s natural to want to understand what exactly is affecting your premiums. Here are some of the characteristics that will influence your business’s insurance rates.

  • Type of Policy

Obviously, the type of policies you are being quoted for will affect your projected insurance rates. Depending on the type and scope of each coverage option you select, your premiums will vary accordingly.

  • Risk

The insurance company will also consider your amount of risk when determining your business’s insurance premiums. For instance, if you are involved in the construction industry and are interested in securing a commercial general liability policy, your rates will likely be higher due to the inherent liability risks that come from working in construction. On the plus side, if you are involved in a less risky industry such as retail, your rates might be on the lower side.

  • Location

If you work out of a physical storefront, then the location of your business can also affect your insurance premiums. This is especially so if you are looking for commercial property insurance. If you live in an area prone to certain natural disasters or in an area with a high crime rate, you are considered to be at a higher risk for weather damage, theft, vandalism, etc. This increased risk will translate into higher insurance costs.

  • Claim History

Your insurer will also look at your business’s insurance history when determining your insurance rates. If your company has filed several claims throughout the years, you should expect your premiums to be on the higher side because you have proven to be at higher risk in the past.

These are some of the factors that will affect your business’s insurance rates.  Looking for assistance with your company’s insurance coverage?  Then don’t hesitate to contact the experts at Club Agency Insurance Brokerage in Garden City, New York.  Our dedicated team is ready to get you the coverage that you need today.

COVID-19 Update:

At RMS and associated firms, business continues as usual. Our staff is remote-capable and available to handle all partners, brokers, and insureds at the present time. Contact us today!Executive Order for Policyholder Payments