David Bell | Aug 09 2018 00:00

How is Your Commercial Insurance Premium Calculated?

Know what insurers look at to determine your business insurance premium.  

How is my business insurance premium calculated? It's a frequently asked question and one that every business owner is right to ask. It's natural to want to know what factors are contributing to the cost of your premium, so you can get an idea of what factors are directly affecting the price that you pay. When you get a quote for business insurance , the insurance company will look at the following:
  • Type of policy
Different types of business insurance policies will vary in cost.
  • Type and amount of risk
This may look into the types of contracts you have and the risks involved in what you do. If you are insuring your tolls of the trade, then the type of equipment will also affect the premium to cover the cost of replacement or repair. Generally, large and industrial equipment will cost more to cover than common equipment such as laptops and toolboxes.
  • Industry
It goes without saying that the type of industry affects your premium. Those involved in a high-risk industry, such as construction, will have a higher premium than someone who works in the retail industry.
  • Location
If you're insuring your business's building, the location will impact your rate. If it is located in a high-crime area or in an area that is at risk of flooding, you may end up paying more in premiums.
  • Yearly income
If your business makes more money, there's more to protect in case something happens. The higher your annual income is, the higher your insurance rates will be.
  • Number of employees
Workers' compensation insurance, professional liability insurance, and general liability insurance are all affected directly by your employees. The more people that work for you, the more people that need to be covered. In turn, the more expensive your coverage becomes.
  • Your deductible
A deductible is the cost you need to pay out of pocket before your insurance coverage kicks in. Usually, a higher deductible will result in a lower policy cost. Meanwhile, a lower deductible will have a higher premium. While it may seem more appealing to have a higher deductible to reduce your insurance costs, you need to keep in mind that if an accident occurs, you'll be responsible for a great out-of-pocket expense. To reduce insurance costs, you can look for potential discounts. Talk to a qualified agent at Bell Black Insurance to discuss your unique situation and we can help to address your business insurance coverage needs without compromising your business's safety. Serving Idaho Falls, Island Park, Driggs, Victor, Swan Valley, Ashton, and the neighboring communities in Idaho, as well as Jackson and Star Valley in Wyoming, we are ready to get you covered today.