No really, all I want is a ballpark quote...... I get this question a lot when it comes to Business Insurance. Unfortunately, it's not that easy to give a "Ballpark Quote" for General Liability Insurance, or any type of Business Insurance for that matter. There are so many variables that go into the quote. Usually when I tell people this they want to know what type of variables, so hopefully this article will help answer some questions.
One of the major factors that can impact your General Liability Insurance is Gross Sales. Some business owners don't even want to give out this information, because they are private companies. However, this is one of the ways insurance companies measure the risk. Simply put, an insurance company sees a business with $1,000,000 in Gross Sales more susceptible to risk than a business in the same industry with $100,000 in Gross Sales. It's a numbers game so to speak. The more sales, the greater chance of risk. I'm not saying I agree with this approach, it's just one of the factors companies use to measure risk.
The second major factor is the type of business. Each business is going to be classed using a classification code. Obviously, some classes carry more risk than others. Take for example, a manufacturer of fitness equipment, some insurance companies won't even write it. Classification can play a huge factor at times.
Another factor that impacts a General Liability Insurance quote is claim history. This one is pretty obvious I know, but it's still worth mentioning. If you've had an insurance claim within the past 5 years, it can have an impact on your rate, especially if the payout was substantial. Prior to quoting or binding, the underwriters will most likely want to know loss control measures that have been put in place to ensure a similar loss/claim does not occur again.
Lastly, years in business can play a factor. Just like the old saying goes, "the older you get, the wiser you get". Experience can be a factor. A company that starts a new business with no management experience in that field will pay more than a business with 20 years of experience (all other factors being equal of course).
When you put all these factors together, you can see why a "Ballpark Quote" isn't that easy. These are just some of the variables that go into a General Liability Insurance Quote. Be sure to talk to your agent about any questions you have. If you don't have an agent, feel free to contact me. I am always happy to help.