Small business insurance is not something that is optional for small business owners today. The question of “How much is small business insurance?” is one that every small business owner needs to find the answer to as quickly as possible. Unfortunately, there is no one cost that works for all small businesses. There are an entire host of mitigating factors and circumstances that will affect your insurance costs, including those listed below.
Types of Coverage
There are a wide range of coverages available to businesses today. Some are part of what is often referred to as a business owner’s policy or BOP. This policy bundles together some of the more common business insurance policies, such as building insurance, property insurance, signage insurance, general liability insurance, loss of business insurance (due to closures for repairs and such), etc. Other businesses may need additional policies such as:
- Workers’ Compensation Insurance
- Commercial Auto Insurance
- Cyber Liability Insurance
- Professional Liability Insurance
- Errors and Omissions Coverage
- Commercial Umbrella Insurance
The costs of insurance to your business is unique to your business and may depend on a wide range of factors – even if the coverage you are purchasing appears to be identical to the coverage purchased by other businesses.
Risk Factors
The reason there is such variation in the costs of small business insurance protection is because each small business has unique risk factors to consider. These risks factors can include anything from the age of your building and location of the building where your business is located to the type of business you’re operating and the costs of equipment and inventory you have on hand at any given time.
After all, insurance exists to protect these things. The greater financial risk they represent to insurance companies, the higher your small business insurance costs will be.
Deductibles
One thing you can do that will have a direct impact on the costs of your small business insurance coverage is to change your deductible. A higher deductible, meaning you cover more of the costs involved in recovering from an incident, the lower your monthly premiums will be. The lower your deductible, the greater the risk to the insurance company, the higher your monthly premiums will be.
Work with a reputable independent insurance agency today to learn more about your needs and costs involved in buying small business insurance to protect your business. The bottom line is that you simply can’t afford to do business without this essential insurance protection.
