What You Can Do To Counter Rising Commercial Insurance Rates

If you have commercial insurance, you may have noticed that your rates have increased. The reason why may not be straightforward.

Commercial Insurance Companies are Regulated by States

Insurance industry regulations in every state must meet the following criteria: The rates must be high enough to keep insurance companies in business, but not so high that they generate excessive profits. Rates cannot be unfairly discriminatory, but must be based on expected claim and cost variables.

Factors Used to Set Commercial Insurance Rates

These cost and claim variables can include factors such as:

  • Age of building: The construction date of your building matters. A building with older wiring is more vulnerable to fire that could result in the need to completely rewire the structure.
  • Age of equipment: If your equipment is older, replacement and repair will probably cost more after a covered event. On the other hand, it is often cheaper to repair old equipment than replace state-of-the-art technology.
  • Geography: The address of your company matters when calculating your commercial property insurance rates. Are you likely to suffer flood damage or get hit by a hurricane? Are land values in the area relatively high or low?
  • Security: Is the building in a high-crime neighborhood? Does your business involve hazardous materials or use explosive or toxic chemicals?
  • Size: Does your facility have many thousands of square feet? Is it a storefront?
  • Type of equipment: Does your business rely on heavy or specialized manufacturing equipment or top-of-the-line computer technology? Is your equipment tailor-made for you, or is it easily replaced?

These are examples of factors commercial insurers use to establish rates for commercial property coverage.

When Rates Change, Turn to Your Insurance Agent

Staying on top of commercial insurance rates requires an understanding of how insurers establish rates for different lines. To eliminate the complexity of the insurance industry, work with an independent insurance agent. Your agent will always have access to multiple companies and provide you with the confidence that you are getting the right coverage at the right price.

Contact Your Independent Agent for More Information

Given that businesses require a suite of coverages for maximum protection, it is best to turn to an independent broker or agent to evaluate the rates offered by different companies. Otherwise, you could find yourself spending your time on insurance matters rather than on running your business. Avoid the hassle and maximize your savings by contacting a local independent insurance agent, contact us.

NOTICE: This blog and website are made available by the publisher for educational and informational purposes only and is subject to change. It is not to be used as a substitute for competent insurance, legal, or tax advice from a licensed professional in your state. By using this blog site you understand that there is no broker client relationship between you and the blog and website publisher.