Factors Affecting Coverage Costs

Factors Affecting Coverage Costs

liability insurance premium

If you are shopping for insurance, you might wonder what you are actually getting for the price. You might also wonder what affects the price of your policy. If you are requesting a company quote, the liability insurance premium will take the following things into account.

Size and Location of Your Business

The larger the company, the more insurance you will probably need to account for the housing and property of your operations. The potential for slips and falls increases the larger the property, and the age and location contribute to risks as well.

Type of Operations

What your company does will also contribute to the cost of your insurance premium. The more hazardous the industry, the higher the cost will be. Less risky operations, such as administrative or consulting, carry lower coverage costs.

Number of Employees

While it may seem odd, the size of your labor pool also affects the cost of your insurance. As with property concerns, the more employees you have, the greater potential for accidents. These risks can be as minor as spilling coffee onto computer equipment or being negligent with heavy machinery and causing serious injury.

Although a liability insurance premium isn’t standard between companies, it should be affordable and effective at handling potential claims. Do your homework to find out about industry standards.