Here are some of the factors that might affect your business’s insurance premiums.
As a business owner, you know how important it is to get your company the insurance protection that it needs. However, this might be the extent of your insurance knowledge. If this is true for you, then you may have some questions regarding your commercial insurance. For instance, you might be wondering how your insurer determines your premiums. Here are some of the factors that will affect your business’s insurance costs.
Certain industries are simply more inherently risky than others. For instance, businesses involved in the construction industry tend to carry higher risk than businesses in the retail sector. If your business is involved in a riskier industry, you should expect your insurance rates to be on the higher side. This increased cost is meant to offset the likelihood of you filing a claim with your insurer.
Your business’s location will also influence your insurance rates. For instance, if your building is located in an area prone to certain extreme weather events (earthquake, flood, hurricane, etc.), then it has a greater chance of sustaining physical damages. This increased risk will translate into higher insurance costs. Additionally, if your business is located in an area with high crime rates, your insurance premiums will be higher due to its increased risk for vandalism and break-in.
Finally, your insurer will look at your business’s claim history during the underwriting process. If your business has filed several claims in the last few years, this is a red flag for any insurance company. Prior claims mean that your business is engaging in risky business practices and makes it more likely that you will a file a claim in the future. As a result, insurance companies will likely charge you more for coverage than they would a business without prior claims.
These are some of the factors that can influence your commercial insurance costs. Do you have further questions regarding your business insurance? Then don’t hesitate to contact the experts at Stromsoe Insurance Agency in Murrieta, California. We are ready to assist you with all your coverage needs today.