How Much Does Business Insurance Cost?

The cost of business insurance is based on different factors, including the type of business you own and where and how it operates.

Types of Business Insurance

There are several basic types of business insurance. General liability coverage protects against loss experienced from theft, damages and other risks associated with the day-to-day operation of your business. There are different employee benefit business insurance plans, such as health insurance, workers' compensation plans and others that are provided to protect your employees and retain their services.

A business can use insurance as a way to fund a buy-sell plan to allow surviving partners or owners to carry on in the event of a partner's or co-owner's death. A business may also purchase a life insurance policy for an employee whose talents are critical for the business's success. The death benefit would be used to recruit and train a replacement and make up for cash loss in the event of the key employee's death.

Factors that Determine Pricing

To provide you with an accurate quote for a particular type of coverage, an insurance company needs to consider several factors. For example, your need for general liability coverage will differ depending upon whether you run a trucking company or a clothing store. The location where you do business—including your ZIP code and the makeup of the neighborhood (i.e., whether it is a residential or business district)—will have an impact on the cost of your insurance.

Pricing for business succession plans or health insurance for your employees is going to be based on the participation rate of the employees, the makeup of your company, the average age of your employees and certain health risks, such as smoking.

Obtaining Pricing Information

You should consult with an insurance agent who specializes in businesses and their insurance needs. This individual can provide you with the one-on-one attention needed to assess your needs and determine the insurance types required for your business. The agent can also give you a sense of the costs involved and the process required to submit an application and obtain your business insurance protection.

blog comments powered by Disqus