The cost of business insurance can vary depending on a number of factors, including:
- The type of business. Some businesses are considered to be higher-risk than others, and as a result, they will pay higher insurance rates. For example, businesses that operate in hazardous industries, such as construction or manufacturing, will typically pay higher rates than businesses that operate in less hazardous industries, such as accounting or consulting.
- The size of the business. Larger businesses typically pay higher insurance rates than smaller businesses. This is because larger businesses have more assets to protect and are more likely to be sued.
- The location of the business. The cost of insurance can also vary depending on the location of the business. Businesses located in areas with a high crime rate or a history of natural disasters will typically pay higher rates than businesses located in safer areas.
- The business's history. A business with a history of claims will typically pay higher insurance rates than a business with a clean claims history. This is because insurers view businesses with a history of claims as being more likely to file future claims.
- The business's financial strength. Insurers also consider a business's financial strength when setting rates. Businesses with strong financials will typically pay lower rates than businesses with weak financials.
How to Mitigate Against Higher Business Insurance Rate
There are a number of things that you can do to mitigate the cost of insurance premiums, including:
- Shop around for quotes. Get quotes from multiple insurers before choosing a policy. This will help you to ensure that you are getting the best possible rate. Working with an insurance broker will provide you with multiple choices.
- Increase your deductible. Increasing your deductible can help you lower your insurance premium. However, it is important to make sure that you can afford to pay the deductible in the event of a claim.
- Take steps to reduce your risk. There are a number of things that you can do to reduce risk, such as implementing safety procedures, and training employees. By reducing your risk, you can help lower your insurance premium.
- Bundle your insurance policies. Many insurers offer discounts for businesses that bundle insurance policies together. For example, you may be able to get a discount if you purchase both property and liability insurance from the same insurer.