INSURANCE COSTS
What Drives the Cost Of Insurance — And What YOU Can Do About It
Like everything else , insurance rates have gone up , in some cases substantially over the past year . Some reasons for an increase are obvious , like you ’ ve added new locations or equipment . Some reasons for the rising cost of insurance are not as clear . Reinsurance costs ( the insurance that the insurance company purchases ) have doubled because of the large amount of CAT storm losses experienced across North America . Those increases are passed down to policy holders .
While it may seem like the best way to cut costs is to deleted coverages , let ’ s take a look at what goes into determining the price of your policy and then we can explore alternative ways to reduce costs while maintaining the protection you need .
WHAT DETERMINES THE PRICE OF MY POLICY ?
Here are the five main factors that affect the cost of business insurance :
• Potential risk
• Claims history
• Number of employees
• Annual income
• Business location
POTENTIAL RISK
Certain industries are naturally at a much higher risk than others , so risk is a big factor for business insurance . For example , construction companies are much more likely to be at risk of a visitor filing a lawsuit against them due to site injury rather than a retail business or a business located in an office . The riskier your business is to insure , the higher coverage costs will likely be . Smaller businesses or businesses with lower risk will benefit from more affordable rates .
CLAIMS HISTORY Your business insurance claims history
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