No two businesses pay the same price. Two contractors in the same city can get very different quotes because carriers price risk on many factors. Here’s what moves your premium for the most common policies, and what you can do about it.
What affects the cost of business insurance
| Factor | Why it matters |
|---|---|
| Industry and class code | A roofer or trucker carries more risk than an accountant. Your class code is often the biggest single factor. |
| Payroll | Workers comp is priced per $100 of payroll in each class code, so more payroll means a higher premium. |
| Revenue | Many general liability policies are rated on gross sales. |
| Claims history | Recent claims, and your workers comp experience modifier (X-Mod), raise or lower your rate. |
| Location | Where you work and garage vehicles affects liability, property and auto pricing. |
| Limits and deductibles | Higher limits cost more. Higher deductibles cost less. |
| Vehicles and drivers | Vehicle type, radius of operation and driving records drive commercial auto and trucking premiums. |
| Years in business | New ventures often pay more until they build a track record. |
Cost by type of coverage
General liability
Usually rated on revenue or payroll and your class code. Low-risk offices and services pay the least. Trades that work on job sites or in customers’ homes pay more.
Workers compensation
Calculated as (payroll ÷ 100) × your class code rate × your experience modifier. Getting class codes right is one of the easiest ways to avoid overpaying, and auditors check them.
Commercial auto and trucking
Based on vehicle type, use, radius, garaging location and driver records. New-venture trucking operations typically pay the most.
Professional liability
Based on your profession, revenue, contract sizes and claims history.
7 ways to lower your premium
- Make sure every employee is in the correct workers comp class code.
- Report accurate payroll and revenue, so audits don’t surprise you.
- Bundle general liability and property into a business owners policy (BOP) when you qualify.
- Raise deductibles you can comfortably afford.
- Keep a clean driver list and run motor vehicle records before hiring drivers.
- Put a written safety program in place to reduce claims.
- Have an independent agent re-shop your policies at renewal. That’s what we do.
Frequently asked questions
Is business insurance tax deductible?
In most cases business insurance premiums are a deductible business expense. Check with your tax professional for your situation.
Can I pay monthly?
Many carriers offer monthly or quarterly installments. Workers comp is often available as pay-as-you-go tied to your payroll.
Why did my renewal go up?
Common reasons are payroll or revenue growth, a recent claim, changes in your class code, or market-wide rate increases. We re-shop renewals with other carriers when it makes sense.
Will getting a quote affect my credit?
Some carriers use insurance scores for certain lines, but requesting a quote from us won’t hurt your credit.