So, you have started a small business in your area, already signed a lease, and probably even hired your first employee. But still, you can’t quite shake the feeling that something is missing in your business. Then a friend comes in and asks about your insurance coverage and voila, there you have it. You are missing a commercial insurance cover. Now the problem comes from the fact that you don’t know anything about insurance or have never interacted with an insurance broker Calgary. What does insurance cost for a small business? What should you cover? What should you expect from the insurance cover?
The good news is that you have finally come to the right place. This article is here to explain seven key concepts about insurance that you probably don’t know about yet.
- Type of business
This is perhaps the most important first aspect you need to consider when about to purchase an insurance policy for your business. The type of business you run will also help you determine your insurance cost. Take this, for example; you already know that a construction company will be open to more risks compared to a bookkeeping office. Thus, the difference in insurance policy costs.
- Your level of expertise
How experienced are you in your line of work? Yes! This point will also factor in at the cost of the insurance policy you will be purchasing. You might be asked personal questions about your business like how long you have been working in the business, the type of education that you have, whether all or any of your employees hold and certificates or qualifications, etc.
- Your annual revenue
So, simple math can sum all this up; higher revenue, square footage, more employees, etc. Will all mean higher insurance premiums for your business. How much is your business worth? That is the question you should be asking. The insurer wants to know how much you stand to lose in case your business gets sued.
- Your business location
Your business location has a lot to do with the type of business insurance premiums and costs you will get. First of all, ask yourself if your business receives a lot of customer foot traffic if there are any risks of slip and fall accidents, or any other claims to your business. Your insurers will pay a lot of attention to all of these factors.
- Your employees
Your employee hiring wave will also affect how your insurance rates fluctuate. You will notice that businesses with more employees pay higher general liability, worker’s compensation rates, and error and omissions.
- The policy you want
It all depends on the “features” you are looking for in an insurance policy and what you want it to cover in your business. Adding more policies will equate to higher premiums, and the opposite is also true.
- Claims history
Well, all insurance companies will want to look at your past claims history. Insurers use these records to predict your future claims trend. If you already have a lot of claims records in the past, then you are more likely going to do so in the future, and your insurance policy will be drafted using this data.