How much does business insurance cost?
Price is one of the main concerns for many entrepreneurs when discussing business insurance issues. While it is not possible to give a precise cost for commercial insurance, it is possible to understand what influences it. Here is a good starting point for understanding what influences it.
Factors that influence the price
Different things can cause the price of insurance to vary. All things not always being equal and according to insurers, certain factors will have more weight in the assessment of the risks to be insured.
On the property insurance side, here are the main factors that could influence the price calculation:
Commercial activities
Type of product or service offered
Annual revenue
Territory of activity
Value of goods (equipment, stock, merchandise, etc.)
Building
Characteristics (type, age, construction materials, etc.)
Location
Location (flood zone, proximity to the fire department, etc.)
Neighborhood (the type of businesses around can influence the premium)
Added protective measure (alarm systems, sprinklers, etc.)
As for commercial vehicles, here is a list of factors that may be taken into account in the calculation:
Use (delivery or services, transport of goods, etc.)
Vehicle type
Drivers (number, age, offenses, etc.)
Territory of use of the vehicle
Examples of insurance prices
To illustrate how much commercial insurance could cost, here are 2 examples, a hairdresser and a baker, depending on the coverage chosen and their business reality.
The price for a hairdressing salon
Trendy has been renting premises for its hair salon in Montreal for 9 years. His annual income is $ 60,000 and his equipment is worth $ 30,000.
Example of coverage included with your insurance
All-risk goods: fire, theft and vandalism, water damage
Professional liability of hairdressing salons
Sewer back-ups
Corporate civil liability 2M $
Trendy's insurance cost will be approximately $ 61 per month with a deductible of $ 1,000 in the event of a loss.
The price for a bakery
Antonio has owned a small bakery in Old Quebec for 5 years. He is a tenant of the premises, his business income is $ 255,000, and the contents and equipment to be insured are worth $ 125,000. In order to deal with any accident, he equipped himself with a fire alarm system connected to a central.
Example of coverage included with your insurance
All-risk goods: fire, theft and vandalism, water damage
Theft of money or merchandise
Computer fraud and fraudulent funds transfer
Sewer backup
Equipment breakdown
Corporate civil liability 2M $
Roof water damage
In Antonio’s case, the cost for his insurance will be approximately $ 162 per month with a loss deductible of $ 1,000.
The choice of insurance coverage
Comparing prices is good. However, when the time comes to acquire or renew insurance for your business, you are not just shopping for cost, but for coverage. Hence the relevance of asking yourself questions such as:
What disaster could affect your operations?
How much is your business worth including buildings, inventory, tools, etc.?
Do you work with your hands or do you offer a consultation service?
Do you sell your products online or in a store?
Do you welcome clients to your premises?
Do you use a vehicle in the course of your activities
Answering this kind of questioning is a good way to understand the coverages necessary for your business. The key is to have the right protections to ensure the sustainability of your business, at the right price.
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