When you're shopping for commercial insurance in New York State, knowing how the insurance companies come up with pricing can help you know when you're getting a fair deal and good value.
Here are some of the largest factors insurers consider when setting up business insurance rates.
Industry You Work In
Your industry is one of the biggest driving factors in your insurance rates. What you do, directly affects how likely it is that you could cause harm to others and have an insurance claim filed against you.
For example, construction work often creates direct hazards for people walking around the worksite. Shotty work can later lead to structural failures, fires, or other destruction. If you're an accountant, the risk of causing physical injuries is low, since you're mainly talking to people and filling out paperwork. But if you make a mistake, it could potentially cost your client a bundle of money. If you're an artist, the chance of causing physical injury or any financial harm are both low.
Size Of Your Business
The size of your business is also a large factor. If you serve millions of customers, instead of just a few, there's a much higher chance that something will happen to at least one of those patrons. Similarly, if you hire hundreds of employees, instead of doing everything on a small scale, there's a much greater chance that someone working for you won't exercise the same care that you would.
How Many Claims
Commercial insurance companies also look at your business on an individual basis, even if you are in a higher risk profession. This works similarly to homeowners or car insurance. If you cause multiple car accidents, the company will decide there's a high risk of you filing a claim again, they will increase your premiums. If you never have claims, the insurance company may reward you with lower rates.
The higher insurance limits you need, the more your premiums will be. Your insurance rates are, at a very basic level, a percentage of what the insurance company expects to be required to pay out on the business insurance policy.
If you select a higher deductible, you will pay less and a lower deductible will pay more premium. This is a very common area to adjust on your policy to see how the rates will be affected.
Call your local Cote office now to get your business insurance rates today!
The right rates, the right people, right down the road.