How Much Does Business Insurance Cost?
By Joseph Boyle
, last updated December 22, 2011
Since adequate insurance coverage is an essential part of running any successful business, whether it’s a fortune 500 corporation or a small business run out of your basement, you want to make sure you can get the best deal on your policy. There is no cut and dry answer to the question of how much business insurance costs. There are numerous factors that come into play in determining the price of your insurance. A few elements that insurance companies take into consideration when giving you a price quote are: the size of your business, what sector your business is in, how long your business has been in operation, the location of your business, and the credit history of your business. And that’s just to name a few. As with any type of insurance, the rates you are given by insurance companies will generally reflect whether you are determined to be high risk or low risk. So obviously there’s no easy answer to how much it will cost you to insure your company. Depending upon the above-mentioned factors, insurance for a business can run anywhere from a few hundred dollars for a small business into the millions for a large corporation.
To complicate matters further, there are numerous types of business insurance. So the cost will also vary based on what the individual insurance needs of your company are. Types of insurance run from general liability or damage insurance covering disasters and accidents like fires, floods, theft, and various day to day risks associated with running your company. There is also property insurance, which can cover damages to the actual physical property of the business, as well as the capability of the company to continue to offer service in the face of unforeseen events. Another common form of insurance is referred to as interruption insurance, and this type of insurance covers the possibility that your business will have to close down for extended period of time. Should this occur, interruption insurance covers the loss of profits that your business will suffer from having to close its doors. From there you can secure any number of specialized types of insurance to cover the specific aspects of the way you do business.
If you are looking at health insurance coverage for your employees, again numerous factors will be involved, such as the participation rate of your employees, the general employee composition of the business as a whole, average employee age, and various health factors like whether your employees are smokers or not.
Another important question that will inevitably arise and have an impact on the price of your insurance is how much coverage you should get. There is a delicate balance to maintain here. You don’t want to go too far and throw money away over-insuring your company, but by the same token, you don’t want to be caught in a emergency situation having to foot the bill out of company money.