8 Factors That Can Impact Your Business Insurance Coverage

Insurance prices are always fluctuating and will change for small, medium and large businesses. Several factors impact the cost of your insurance coverage and the size of your business is one of them. 

It’s always important that business owners know what is affecting their business premiums and what kind of changes they can make. 

That’s why in this article, we will dive deeper into it to learn more about what is impacting your insurance coverage. 

The types of business insurance coverage 


Before we dive deeper into this article, we need to go through the types of business insurance coverage that your business needs: 

  • Business owner Insurance: Business owner insurance policy that offers small and medium companies against any financial losses. In case any third-party damages occur from natural disasters, the insurance company will be obliged to pay for the damages done. What a business owner’s insurance covers will all be specified in the insurance policy. 
  • Product liability insurance: This insurance includes products that may possess any harm to a user. For example, if you sell fireworks, they have the potential to harm a user and you may be required to pay for all damages done to them. 
  • Commercial insurance: This type of insurance is usually required by restaurants, manufacturers, or commercial real estate operators. 
  • Professional Malpractice insurance: Professions such as Medicine, accounting, advertising, psychotherapy, real estate, and more, will usually use this type of insurance for protecting themselves against any type of lawsuit. 
  • Homeowners insurance: Any private property damaged by natural disasters. Any bodily injuries caused, or loss or theft caused away, or in the insured house. 

8 Factors impacting your business insurance coverage 

1. Car hauler insurance 


Car hauler insurance is often not strongly considered by some businesses, but this is a common mistake most make. Car insurance is an investment you make in your company in the long term. Car haulers are costly and the cost of repairing them can directly affect your long-term finances. 

Especially if you own a dealership, or transport business, you have to remember that there’s more to think about than only your truck. In this case, all of the cars you are transporting are at stack and if anything occurs, you’ll need to pay for the damages. 

For this particular reason, companies need to get commercial vehicle insurance for protecting themselves against this type of threat. It helps your business operations continue without any issues. 

CoverWallet’s car hauler insurance gives you a few recommendations on how you can protect your trucking business:

  • General liability 
  • Commercial Auto insurance 
  • Cargo insurance 
  • Bobtail insurance 
  • Non-trucking liability 
  • Comprehensive cover 

Moreover, let’s learn more about who needs car hauler insurance. 

  • Companies that establish partnerships with numerous car dealerships 
  • Car dealerships with carriers 
  • Transport companies 
  • Auto repairs with car haulers 

2. Risk

Each industry has its own level of risk. However, for business insurance, risk has a lot of influence. For instance, the industry that is at the highest risk is the construction one. Thousands of people die each year from this industry because they are put through extreme environments and have to adapt to them. 

After all, the more risky your industry is, the higher the coverage costs will be. Therefore, the smaller your risks are in your industry, the more you’ll benefit as a business and have much more affordable rates. 

3. What do you sell or do

How much you are paying for insurance depends on the type of business you are running. The higher the risk of your business, the more you’ll have to pay for the risk. As we mentioned before, manufacturers and construction workers have the highest rates for general liability insurance because it can damage people’s property. 

Let’s not also forget about your liability risk and the risk of incurring liability for third-party injuries is greater for a business that is providing security services compared to one that is only for accounting services. 

4. The value of the items you are using for your professional services 


Have you clarified the type of items you are using for your professional services? List your property’s value and allow it to choose the right coverage for you, regardless if it’s low or high. 

The higher the coverage you need, the higher your premium rate will be. However, if you opt-out for lower coverage, your compensation rate will be much smaller and you’ll be paying a lower premium. 

5. Choosing the wrong plan

40% of people don’t read their insurance policy plans. Due to this, many businesses actually don’t know what their insurance providers are covering for them. This is not good news and not something you want to happen. Restaurants are one of the most common examples included. 

All businesses need to ensure that their staff members are safe at all times and when their staff isn’t, this might cause lots of issues, putting staff members at higher risk and causing them to face further issues in the future. 

6. Your annual income


Larger businesses with higher annual incomes will usually have to protect more people in case something threatens the business. High sales are a direct impactor, but will also be a direct impact on how exposed your customers are. Therefore, the higher your annual income, the higher the insurance premium is going to be. 

Before you choose an insurer, always make sure to look at your annual income and check what kind of coverage they have to offer you. 

7. Your business location

Where your business operates is a direct contributor to your insurance coverage. Each of these situations has its own risks, depending on the type of business you run. For example, if you are renting space, you’ll be paying a higher insurance premium if your industry is riskier. 

However, always keep in mind that it’s best when you have your own space in comparison to renting it. 

8. Your prior claims history

All insurance companies you wish to work with will look at your past claim history. Maybe you might not have one, but if you do, know that they’ll check it out. For example, if you have a bad history and have been sued a couple of times, an insurer will charge you a higher amount because of this reason. 

Also, keep in mind that if your delivery drivers have had several accidents, they will be charged much higher premiums for your auto policy compared to if all drivers on the policy had a clear driving history. 

How businesses can meet their insurance challenges 

When you exercise more caution in the risks associated with your industry, it’s better for you. However, if you want to be sure about your business insurance renewal, follow some of our recommendations: 

  • Start your preparations earlier: The more time you have for working on your insurance program renewal, the more likely it’ll be that you gain results in a competitive insurance market. 
  • Build long-term relationships with insurers: Your relationships with your insurers are highly important. Moreover, when you have a good relationship with them, they can better understand your business and what are the risks associated with it. 
  • Provide detailed business info: Collect accurate and up-to-date information and risk surveys. Insurers will always want to see your business risk control and management program. 
  • Try to do things differently: Your insurers can offer you numerous alternatives for your high-risk business. If your industry is highly risky or you want to take on more risks, your insurer might offer you different pricing options and coverage. 

The final breakdown 

As we said in the article, your business insurance coverage will highly depend on the risk of your industry and your insurance claim history. If you want to be on the safe side, make sure you have a clear record of your past insurance claims and let the insurers inform you of how risky your industry is. 

In conclusion, don’t also forget about building relationships with your insurers. They might give you offers that’ll help you in the long term and this is something you don’t want to miss out on. After all, any type of savings you can make in the long term will be highly beneficial for you. Not only will it help you reduce expenses, but help you concentrate more on your daily business activities. 

About The Author: 

Tony Ademi is a freelance SEO content and copywriter. He has been in the writing industry for three years and has managed to write hundreds of SEO-optimized articles. Moreover, he has written articles that have ranked #1 on Google. Tony’s primary concern when writing an article is to do extensive research and ensure that the reader is engaged until the end.