Why Is My Business Insurance So Expensive?
Business insurance costs can be high for various reasons. Here are some common factors that might be contributing to the expense:
- Industry Risk: Certain industries, such as construction or healthcare, are considered higher risk and typically have higher insurance premiums.
- Claims History: If your business has a history of making insurance claims, insurers might consider you a higher risk, leading to higher premiums.
- Coverage Amount: The more coverage you need, the more expensive your insurance will be. Comprehensive policies covering a wide range of risks are costlier than basic ones.
- Location: The location of your business can impact your insurance costs. Areas prone to natural disasters or high crime rates usually have higher premiums.
- Size of Business: Larger businesses or those with more employees often pay more for insurance due to the increased risk and coverage requirements.
- Business Assets: If your business has expensive equipment or property, it can increase your premiums since the insurer would have to pay more in case of damage or loss.
- Type of Coverage: Different types of insurance (e.g., liability, property, workers’ compensation) have different costs. Having multiple types of coverage can increase overall expenses.
- Policy Deductibles: Lower deductibles mean higher premiums. Choosing a higher deductible can lower your premium, but you’ll pay more out-of-pocket if you file a claim.
- Revenue and Payroll: Higher revenue and payroll can lead to higher insurance costs, as they indicate a larger business with potentially greater risk exposure.
- Regulatory Requirements: Some industries are subject to strict regulatory requirements that mandate certain types of insurance, which can drive up costs.
To potentially reduce your insurance costs, consider the following steps:
- Shop Around: Compare quotes from different insurers to find the best rate.
- Review Coverage: Ensure you’re not over-insured. Only pay for the coverage you need.
- Risk Management: Implement safety and risk management practices to reduce the likelihood of claims.
- Bundle Policies: Some insurers offer discounts if you bundle different types of insurance.
- Increase Deductibles: If feasible, increase your deductibles to lower your premium.
Contact your account manager at Lumen to review your options.