How to lower your business insurance premium
If you’re about to renew your business insurance, you may be wondering what factors—other than inflation—affect your premium. Here are some tips to make sure you have the right coverage and insurance amount.
Factors that affect the price of insurance
How much your insurance costs depends on a number of factors, including what kind of business you run, what kind of activities you conduct and what type of building you’re in.
And if you have commercial vehicles, your premium can vary depending on what type of vehicle it is and what you use it for. Some key factors that impact insurance cost include:
Business activities
- What kind of products you sell, services you offer and activities you conduct
- How much you bring in annually
- What area you serve
- How much your business’s assets are worth, including the building, equipment and merchandise
Building
- What its features are (age, construction, type of materials, square footage, number of floors, etc.).
- Where it’s located
- What’s nearby (flood zone, public utilities, etc.)
- Who else occupies the building
- What type of neighbourhood it’s in (industrial, commercial, residential)
- What security features have been added (alarm linked to a surveillance central station, sprinklers, surveillance system with camera, etc.)
Commercial vehicles
- What type of vehicles you have
- What they’re used for (delivery, transporting merchandise, etc.)
- How many drivers there are and what their driving records are
- What area the vehicles cover
The importance of choosing the right coverage
Take the time to list the coverages and insurance amounts you need or may need when you're getting ready to take out or renew your business insurance. These questions will help you better identify what to consider:
- What kinds of losses could affect your operations?
- How much is your business and commercial property worth, including equipment and merchandise? How much would it cost to reconstruct the building?
- Do you do manual labour or provide consultation services? Do you have any tools or laptops?
- Do you sell your products online or in a store?
- Do your customers visit your offices?
- Do you use any commercial vehicles for your business?
Tips for getting a fair premium, and even saving
Here are some tips that could help to reduce your business insurance costs while maintaining a coverage adapted to your needs.
- Review your coverage needs and choices. As your company changes, so do its needs. It’s a good idea to regularly review your coverage based on your company’s current needs.
Note that it is important to be honest about your income when requesting a quote. That way, you'll avoid unpleasant surprises in the event of a claim. Make sure that the cost to reconstruct the building is consistent with the insured value in your policy. - Bundle your products. Bundling coverage can reduce your premium. An entrepreneur who owns several businesses (for example, real estate assets) will benefit from having them covered by a single insurer.
- Keep an eye on your finances. Your personal credit score can affect your business insurance for certain coverages.
- Think about your location. Geographic region affects premiums. Areas that are less densely populated, have less traffic or are newly developed may help you reduce insurance costs.
Avoid getting rid of coverage just to save money. When inflation is high, it can be very tempting to temporarily remove some coverage to ease the pressure on your budget. But the goal is to have the right coverage at the right price to support your company over the long term.
Need help?
We’re here for you! Feel free to contact our property and casualty insurance agents to learn more about the coverage we offer.
Desjardins Insurance refers to Desjardins General Insurance Inc., provider of home, auto and business insurance products. These tips are provided for information and prevention purposes only. They are general in nature, and Desjardins Business Insurance cannot be held liable for them. Always use caution and consult with a property and casualty insurance agent for comprehensive, tailored advice.