How Much Does Business Insurance Cost

Business insurance costs vary.
Business insurance costs vary.

How much does business insurance cost? There are a wide variety of factors that can affect the cost of sufficiently covering your business. Most business owners worry that they are paying too much for their insurance coverage.

Steve Brooks, insurance expert and President of Steve Brooks Insurance Services, shares important information with LoveToKnow readers regarding the costs associated with business insurance as well as ways to save some money when shopping around for the best coverage.

What is business insurance?

Business insurance policies offer coverage for property owned by the business, including the actual buildings, inventory, raw materials, office equipment and more. Business insurance also provides liability protection to protect the business in the event of any type of lawsuit.

Why should business owners buy insurance?

No matter how large or small your business, you always face liability. This means that your business could be held accountable if anyone suffers a personal injury or damage to their property while visiting your office, or using a product made by your company. Furthermore, every business under the sun owns some form of actual property, even if that property is only a computer. Any and all business items need to be insured to protect the business owners in the event of damage, theft, etc.

How much does business insurance cost?

The price of business insurance varies immensely depending upon the size of the business and the amount of coverage needed. For example, a small home-based business may be able to be insured for as little as $500 per year. However, a company which has office space, employees, business vehicles, and inventory of products will pay thousands per year in insurance.

How can business owners save money when buying insurance?

Business owners can save money on business insurance by utilizing an agent who sells insurance for multiple companies, also known as an insurance broker. Because a broker represents many companies, the agent will be able to shop around for the company that has the best program designed to meet your unique needs, or specializes in insuring your particular type of business.

Most business insurance is sold through independent insurance agents/brokers. The agent will help you assess your insurance needs, and will help if you ever need to file a claim. Independent agents' biggest strength is their ability to shop for the best insurance values among a variety of competing companies.

How much coverage should a business owner buy?

No two businesses are alike, so it is important to work with your agent to go over all of the risks that your company potentially faces. Your agent will help you prepare a list of exactly which coverage and limits you will need.

What insurance companies offer business insurance?

Most of the large national insurance companies offer some form of business insurance. These include, but are not limited to:

  • Allied
  • Nationwide
  • Golden Eagle

Other well known insurance companies, such as State Farm, Allstate and Farmers Insurance usually only insure small businesses.

How should business owners choose an insurer?

Business owners should choose an insurer who is highly rated. However, it's also important to select an insurer who is willing to work with you to provide you with all of the insurance you need, but without demanding extraneous coverage that you don't require. Your agent will be able to help you select which insurer offers the most comprehensive coverage, for the best price for your business.

What are additional considerations to keep in mind when buying business insurance?

The services your company provides - or the products your company sells - will have a great impact on the cost your business insurance. Consider that the higher your business sales, the higher your premium will be.

If you're in a business where consumers have a greater likelihood of being hurt (illness, physical injury, etc) your rates will be higher than those who do not. For example, consider a home-based business where the insured is a writer versus a company that makes frozen dinner entrees. Certainly the company manufacturing food items poses a greater risk to consumers; therefore the rates will be higher.

About Steve Brooks

Steve Brooks can answer insurance questions beyond "How much does business insurance cost?" Steve Brooks is President of Steve Brooks Insurance Services, a full service independent insurance agency founded in 1989. He has received numerous industry and legislative awards including a Certificate of Recognition from the California State Senate in honor of outstanding service and dedication to the insurance industry and a California State Assembly Award for exemplary dedication and service to the insurance industry. Steve Brooks Insurance Services was recently named one of the top 10 largest insurance brokerages by the Pacific Coast Business Times, and Steve was also named in their Who's Who in Insurance.

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