Many factors can affect the commercial insurance policy you have in place for your business. In addition to these factors, there are also inherent risks that should be understood as well.
Today we will go over some factors and business risks that can affect your commercial insurance policy and will help you find the best and most affordable options available for your company.
What is an Insurance Risk?
To better understand insurance risk, you should first understand the insurance risk.
Operational Risk: This has to do with the day to day dealings of your business. It is the handling of equipment, the workers, customers, and the product or service you are offering. It is important to ensure tangible assets to mitigate risk.
Strategy: this is when the business strategy is diluted. If you fall behind because you outperformed or undercut your prices, it can harm your business.
Compliance: This is the ability of the business to adhere to rules and regulations outlined by the government or the industry. This can include taxes, zoning, property laws, and more.
Reputational: You also want to protect your business from security problems, including data breaches and other cybersecurity issues.
Factors Affecting Insurance
When trying to secure the right commercial insurance for your business, you must factor in the location and industry of the business along with the risks we have described above. Some industries definitely carry more risk than others.
For example, the construction industry has a much higher risk than a company in the retail sector. So, the insurance may be higher for the construction company because they are more likely to file an insurance claim.
When it comes to the location of the business, if you are somewhere that is more prone to natural disasters, you will be at a higher risk of sustaining damage, and this will reflect in your insurance premiums.
Additionally, if you are in a higher crime area, insurance premiums can also be higher because of the elevated risk of vandalism and break-ins. Restaurant owners, for example, are seeing increased burglaries due to many restaurants sitting vacant during the coronavirus pandemic.
Business Risk Protection
If you have a business in a higher risk industry, then you may want to familiarize yourself with business risk protection that can help mitigate risk.
Property insurance, liability insurance, business interruption insurance, and workers compensation are all coverage options you should consider for your business. If you are a business that provides a service to its clients, then you may also want to consider insurance coverage options that can be included on a general liability policy.
For example, the coverage that helps with any errors or omissions due to an unintentional mistake that caused harm or injury to a third party may be beneficial for your business.
If you need help finding affordable commercial insurance because you feel you are a higher risk business or want to make sure you have the right coverage in place, then don't hesitate to contact the experts at Panorama today for more information.