Corporate Insurance Prices

The Cost of Business Insurance

The insurance premium may be based on:
  • Square footage of the floor area
  • Payroll
  • Sales receipts
In any case, your cooperation for access to your books, records, and/or premises is expected. Policy periods are generally annual. Payment is due when coverage starts or as agreed upon. Premium financing is usually available, but be aware of the interest rate you will be paying as well as the authority given to the financing organization and how any disruption in your payments will affect your coverage. Your cost will be unique to your exposure; it will be similar to risks insured by the same company, but since this is a competitive market, different companies will have different premiums. You should know the basis for the premiums.

Property insurance premiums are based on a rate per $100 coverage. Factors that go into making the rate are construction of building, occupancy and use, public protection, neighboring exposures and internal protection, such as sprinklers, etc..

The premium basis for liability insurance depends on the type of business. Stores and manufacturing are based on gross sales. Contracting and service businesses are based on payroll. Apartments are based on the number of units, hotels, on gross sales, and office space and property owned and leased to others is based on square footage area.

Anything based on sales or payroll is audit able and can result in additional or return premium. Companies have minimum and deposit premium requirements, which can and do vary, and should be considered when shopping.