How is my business insurance premium calculated?
Insurers take into consideration a variety of different factors when calculating your business insurance premium.
These factors are generally; the industry you work in, where your business is located, the type of policy you require, the amount of risk, the level of cover you need, the size of your excess, the size of your business, the number of claims you have made in the past, how much your company is worth, and your personal circumstances.
The industry you work in will play an important role in determining how much you will pay for your business insurance, for example, if you work in the retail industry you will usually pay less than someone who works in the construction industry. So too does the area in which your business premises are located. If your postcode indicates that you are situated in a high crime area, or one prone to flooding, your premium will be higher.
The underwriter will assess your application and decide what level of risk is involved, for instance, if you wish to insure heavy plant equipment this will be significantly more expensive than insuring office equipment such as laptops and mobile phones.
The level of cover you require plays an important role with regard to cost; generally, the more cover you require, the higher the premium. Similarly, if you are prepared to pay a higher excess on your policy your premium will be lower as a result. If you are in the market for employer’s liability insurance then the number of employees you have will directly contribute to the amount you can expect to pay.
Insurers look at how many claims you have made in the past to ascertain how much of a risk you present. The more claims that you have made, the higher the premium. Your personal circumstances may also be taken into account, such as your age, and medical history, along with the net worth of your company.