Home worker insurance

No matter the size of your business, insurance is critical for the overall protection of your bottom line. This is particularly true for small businesses that run on minimal capital since a large financial loss can cripple your operations or even put you out of business! However, some business owners go about their operations without insurance under the presumption that it will be too expensive to maintain. This is not entirely correct. Although business insurance can be costly, it does not come at a blanket price. Several elements play a role in determining how much your premium will be. Read on to learn three factors that will influence your business insurance premium.

The line of business you are in

One of the primary factors responsible for the cost of your business insurance premium is the type of industry that you are in. Some industries will require multiple types of insurance to ensure that they are protected from both financial and material losses. For example, if you are in the construction industry, you need a vehicle to transport your supplies, which means auto insurance. Additionally, you will need workers compensation insurance to protect yourself as a tradie and any employees you have, not to mention liability insurance, an all-risk cover and more! On the other hand, an individual who owns a small retail store will need fewer policies.

The size of your business

The second factor influencing the cost of your business insurance premium is the size of your company. A company comprising just a few employees is not likely to have as many workers compensation claims than one with thousands of employees will be liable to. Moreover, a business that has a low bottom line will be less vulnerable to flimsy lawsuits than a corporate company that makes substantial profits.

The risk your business is exposed to

The third factor that will influence the cost of your business insurance is the degree of risk that you are exposed to. Although accidents are a part of life, some industries are at a higher risk of these accidents and disasters than others are. The construction industry is a perfect example of this. If you specialise in small-scale home renovations then you may not have a premium as high as a businessperson who specialises in the construction of commercial buildings. Nevertheless, when you compare the premiums that these businesses pay, they are likely to be higher than a tradie that engages in plumbing repairs daily. This is because the former lines of businesses are exposed to a higher risk of injury and additional losses.

To learn more about business insurance, contact a provider of these services near you.