understanding your insurance policy

understanding your insurance policy

Why Do The Business Insurance Premium Rates Vary?

by Tuĝba Van Den Heijkant

If you are shopping for business insurance, you want to ensure you get the best price for your plan. Ideally, the policy should cover all your requirements and have a reasonable price. However, if you fill out various commercial insurance plans several times, you'll notice that the prices change often. This is usually determined by the details you fill in the documents. Here are a few factors business insurance providers consider when setting the premium for your company's coverage.

Type of Work

If you sell heavy machinery, your commercial insurance needs will vary from a company that offers car hire service. Also, the risks related to a massage therapist will not be similar to those who run a food business. 

So, you will be expected to provide details of the company's products or services so the insurance company can set the appropriate premium. If your professional activities pose higher risks, you can expect to pay more for the policy.

Value of Work Equipment

The insurance company will also consider the value of the equipment or tools the company uses to make the products or for service provision. This includes manufacturing or fabrication of machines and tools, furniture, computers, and other office equipment. You will need to state the actual value of the property to pick the best coverage. 

The sum insured should be precise (not too low or high) to avoid complications when filing a claim. If you provide a low estimate to reduce the premium, your compensation will be more inadequate, meaning you won't get maximum protection.

Business Size

The size of the company will be an essential factor to consider when setting insurance rates. This is usually determined by the total number of workers and the revenue. If the company has a large number of employees and earns a high income, the premium will be higher. 

Insurance carriers allow clients to amend the employee count and revenue regularly to ensure companies only pay for what they require. Make sure you ask the insurance company about this before getting the plan.

Claim History

Insurance companies also consider the number of times a client has filed claims before providing the coverage. If you have filed for claims continuously, your business will be categorized as a high risk, so you'll pay more. 

The insurance reps will also factor in the crime rate in your area and the fire statistics of the company's location or the building. You will lessen the insurance cost if you have invested in additional enhanced security features and a fire alarm system.

To learn more, contact a commercial insurance agency in your area.


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understanding your insurance policy

You keep a copy of your insurance policy in your file drawer, but do you know how to read and understand the policy? Having an insurance policy will protect you from losses, but it won't protect you from all losses. To get a better understanding of what your policy will and will not cover, read through this blog. You will learn about all different types of insurance policies and learn the terminology used in the documents that you have read. Hopefully, by the time you have read through the content here, you will know exactly where your insurance policies are lacking so you can make changes.