Any organization paying for business liability insurance will want to know what affects the pricing of its policies. Given the diversity of businesses and their liability exposure, this amounts to lots of factors. However, an insurer will typically look at these four major factors to determine most of a policy's price.
Traffic
The simple number of people moving through a business on any given day dictates much of its liability exposure. Notably, this includes employees, customers, contractors, and even delivery people. Anyone who walks or drives on the property represents at least some liability risk that the insurer may have to cover for things like slip-and-fall accidents. Consequently, they will raise a company's rates to ensure they're not taking on too much risk by offering an insurance policy.
You may be able to mitigate some of the risks to acquire lower premiums. For example, many businesses explicitly restrict traffic flow to the safest areas of their properties. Barriers and access-limiting systems are especially useful if you want the insurance company to reflect those measures in your premiums.
Security
Businesses need to secure their premises to minimize insurance costs. If you're worried about the price of your policies, it's a good idea to talk with your insurance agent about potential mitigation options. For example, retailers can usually benefit from installing surveillance cameras at appropriate locations. Likewise, if you add security features to the property, it's always a good idea to ask the insurance company if those come with any discounts.
Asset Values
Insuring expensive assets means higher premiums for the customer. Folks who want to see lower premiums for higher-value assets have a couple of options. If the assets are going to have stable or rising values, they might take on higher deductibles to reduce their insurance costs. A second option is annually reviewing valuations on declining assets and then reporting them to the insurance company to acquire lower premiums. Some businesses may just elect to accept the higher premiums to insure their most valuable assets, especially if those items are difficult or impossible to replace.
Local Risks
Some local risk factors will drive premiums up or down. If a manufacturing business is situated close to a river, for example, that can drive up premiums because there is a risk of accidental pollution leading to a lawsuit. The insurance company also has to factor in how successful claims and suits are in the locality because that can dictate what it might have to pay.
For more information about business liability insurance, contact a local company.
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