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Many factors play a role in deciding general liability premiums.To make an accurate evaluation on a policy, the insurer needs to know about your small business. The insurer has to evaluate how much risk they are taking on when covering the business. The factors below influence the cost of your general liability premiums.


Factor 1: Business Size and Condition

One of the primary reasons to have General Liability Insurance is to protect a business from the cost of claims. The price of coverage will be based on the size and physical condition of your office building. For example, the bigger the property the higher chance for a slip-fall injury. If your property is open to the public it may increase your rates. The condition of the property is examined by the insurer based on the year built and building codes.


Factor 2: Business Type

Not all businesses have equal risk. In order to calculate the risk, the insurer needs to know the line of business. For example, a construction company will have considerably higher risk than a car dealership. The higher the risk in your business, the higher the rates.


Factor 3: Business Experience  

Insurance application forms inquire about years of business experience. Longer business experience signifies more business and financial stability, lowering the risk and premium.


Factor 4: Number of Employees   

More employees means more risk. If a business has a lot of employees, it increases the potential for claims.


Factor 5: Business Location

A business’s geographical location can affect premiums. Urban areas may have a higher chance of a violent crime. Higher traffic areas can increase premiums since more people are visiting the business. However, businesses located in suburban areas with lower crime rates may have lower liability rates.


Factor 6: Limits and Deductibles

The higher the business coverage limits, the higher the policy cost. As for deductibles, the more you spend out of pocket, the lower your monthly premiums will be.


Factor 7: Claims History

Previous claims are taken into consideration when insurers issue policies.


*For further questions and concerns, please contact your insurance provider or feel free to give us a call, 310-698-0140. We will gladly assist you. Thank you!


Posted 9:55 AM

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