Business Insurance Costs

When it comes to business insurance costs, the rate is going to vary based on several factors.  Often times we get the question, how much does business insurance cost?  Sometimes new businesses will even want us to give them a "ballpark" quote or an estimate.  Since so many variables are factored into it, unfortunately there isn't a sliding scale based on classification or other characteristics.   Below is a guide to hopefully answer some of your questions as to why you are paying what you're paying and why your insurance costs might have went up, or down.  Again, this is only a guide.  Every insurance company has different ways to calculate your rate.  I encourage you to talk to your agent or one of our licensed agents, if you have any questions.

General Liability

• Loss History. Obviously claim/loss frequency is a primary factor. 
• Business Experience (Years in Business).  Some carriers won't write a certain class of business unless they've been under the same ownership for 3 years. 
• Gross Sales.  Gross sales are used to measure the exposure.  At the end of the policy period, the insurance carrier will send out premium audit information. 
• Payroll. Payroll can also be used to measure the exposure. 
• Classification (Type of business). Certain classes of businesses are going to be higher than others.  Some insurance companies won't write certain business. 
• Square Footage Occupied.  When looking at slip and fall exposure, this can be a factor.  
• Product Data (for Product Liability). Are you a retailer, manufacturer, wholesaler, distributor, installer or servicing. 
• Subcontracted Work.  If a large percentage of the work is subcontracted, it could impact the rate. 

Property

• Loss History. Obviously claim/loss frequency is a primary factor. 
• Building Year.  Insurance carriers like newer buildings and will sometimes give a credit if the building is less than 10 years old. 
• Square Footage. Carriers want to know the square footage occupied.
• Updates to Building.  Updates to roof, plumbing, electricity and HVAC are always a plus. 
• Building Material.  Masonry non-combustible is going to rate better than say a frame structure, especially if there is a greater exposure to fire. 
• Neighboring Exposure.  If the business next to you is welding, this could impact your rate or whether a carrier will write your business. 
• Proximity to Responding Fire Dept. Obviously if the nearest fire department is 20 miles away, this could impact your rate.  Also if it's a volunteer fire dept. 
• Percent of Building Occupied. Insurance companies do not like vacant buildings.  If the building is less than 70% occupied, the carrier might ask questions. 
• Monitored Alarm.  Carriers want to make sure property is secure. 

Workers Compensation

• Loss History. Obviously claim/loss frequency is a primary factor. 
• Number of Employees.  If you have have more employees, the rate can be higher.
• Job Classification.  An office/clerical class rate is going to be less than a warehouse class. 
• Payroll. The more payroll a business has the premium is going to be higher (if class codes are the same). 
• Are owners/officers excluded?  A large percentage of payroll comes from officers/owners.  Excluding them can lower the premium.