How Are Commercial Policies Rated, Deductibles Selected, and Premiums Developed?

Insurance companies consider a variety of factors when rating a commercial insurance policy. The rating plays a big role in determining the premiums that a business owner will have to pay towards maintaining the required insurance coverage. Commercial policies, or business owner policies typically provide small business owners with general liability coverage and protection against property damage and business interruption. The amount that a business owner has to pay in monthly, quarterly or annual payments depends on several rating factors.

Factors that are often considered by insurance companies include the type of building your business occupies, its square footage, construction type, location and availability of safety features such as fire sprinklers and fire retardants. If your commercial policy includes general liability coverage, the insurance company might consider factors such as your monthly payroll or total revenues over a specific time frame. Premiums are then calculated based on your business rating exposure and the deductibles that you select. Typically, the higher your deductibles, the lower your monthly premium.

If you are a small business owner looking for help with a commercial insurance policy for your business, please contact the insurance specialists at Stromsoe Insurance Agency, located in Murrieta, CA. 

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