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Factors That Affect the Cost of Your Small Business Insurance

factors that affect the cost of your small business insurance f

As a small business owner, you know that ensuring the success of your dream business requires a great deal of time. You have to prioritize costs, and insurance often tends to fall to the bottom of the list. However, this can be dangerous because not having the appropriate coverage for your business could be a reason for its downfall. Read on to learn how much small business insurance costs so that you can budget accordingly.

Factors Affecting the Cost of Small Business Insurance Quotes

Let’s look at several aspects that affect the overall cost of small insurance coverage to help you understand how much it may cost you.

Purpose or Type of Your Business

The industry your business belongs to will be a deciding factor in what types of insurance you need and how much it will cost. You will need a different kind of policy if you work with your hands to install, build, or fix things as compared to providing a specialized consult or service.

A business insurance broker has the knowledge and expertise to help identify the right policy that meets your company’s specific needs.

Worth of Your Business

This comprises all the assets in the name of your business, including inventory, machines and equipment, the building you operate in, vehicles you use regularly, and more. Your assets can vary across industries, so it is best to ensure that your policy matches the current value of your business and covers the operations.

Specific Risks in a Business

The level of risk a business has is a critical factor in determining small business insurance pricing. This is because more sales or larger property indicate more risk exposure. Thus, the higher your revenue or, the higher the insurable value of your commercial property, the more expensive your business insurance costs will be.

Types of Services Provided or Products Sold

The kinds of products you sell and the types of services you offer determine how much your insurance will cost. This is why it is best to consult a business insurance broker who can assist you and ensure you have the right coverage.

What Kind of Coverage Do You Need?

It is essential to remember every business has unique needs. Understanding the different types of coverages available for small businesses can help you determine the best policy for you. That said, there are several standard business insurance policies that are often recommended for most companies.

General Liability

This policy protects your business from liabilities if bodily injury or property damage is caused to a third party by you or one of your employees.

Product Liability

This coverage protects your business from legal action related to a product sold or developed by the company. It is also ideal for consumer goods and manufacturing industries. The cost of this small business insurance policy depends on factors such as the type of product, number of units sold in a year, their purpose, the location of their sales, and more.

Professional Liability

A professional liability policy is crucial for professionals such as lawyers, doctors, architects, consultants, and more. It ensures protection against any legal action. The cost typically depends on what type of service or consultation you offer and how many clients or patients you serve.

Property Insurance

You should protect your business property against water or fire damage and other types of losses. This includes the physical buildings, business contents, equipment, tools, inventory and stock, and other valuables. The cost of this type of small business insurance quote will depend on many factors, such as the value and size of the asset.

Commercial Auto

If you are using a vehicle to transport tools, equipment, or goods, it is beneficial to have commercial auto insurance. If your business has less than five vehicles, you should consider insuring each one separately, like personal vehicles. However, if you have more, you may insure them as a fleet to benefit from collective pricing. The cost of commercial auto insurance will typically depend on the type of vehicle, its use, and the operator’s driving record.

Cyber Insurance

If your business relies on technology for daily operations, it is advisable to buy cyber insurance for adequate protection. It is also a good option for any business that uses technology for payroll, marketing, payment processing, and more. Many factors affect the cost of this insurance, including the company’s revenue, the number of employees, and the level of cybersecurity required to protect against data breaches and hacks.

Industry-Specific Policies

In addition to the common types of small business insurance coverages, you may consider buying industry-specific policies tailored to your needs. This will ensure adequate protection and safeguard your business from unexpected events and financial losses.

How Much Does Business Insurance Cost?

Although there is no average cost for business insurance, there are average rates within specific industries. The premium amount depends on the inherent risk associated with the business, the number of employees, and the amount of coverage required. Speaking with an insurance broker can help you better understand what you need and what your insurance will cost.

Protect Your Small Business with Our Expert Support

Factors That Affect the Cost of Your Small Business Insurance

As a business owner, it is essential to know which assets you need to insure and which policies are the best for your industry. At Orr and Associates, we have experienced business insurance brokers to help you understand the specifications of your insurance policy.

If you have any questions or would like to talk with a broker to obtain a small business insurance quote, you can call us at 905-833-6691 or toll-free at 1-866-521-5926. You can also fill out the online form to get a quote. We will help you choose the best available option for your business!

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