Does the location of your business affect rates on liability insurance? Besides the direct effects, would you save money by choosing one new location over another? Indeed, the location of your business could directly impact your liability premiums.
Factors that Affect Premiums
There are probably an endless array of factors that could make a different in your premiums. The following ones could play a major role in your premiums, making it something to especially consider if you are looking at locations at the moment.
- Geographic Location: Crime is more common in urban than suburban areas. While more violent forms of crime can be part of the equation, it is often vandalism and petty crimes that make up the premiums increase in urban areas. Of course, specific cities and areas take on these individual characteristics (in crime, etc.).
- Structures and Surrounding Structure: You can expect lower premiums with newer buildings, especially those that are up-to-date with modern codes, safety, and accessibility. Flammable materials, lack of accessibility, and higher premiums may meet you in older buildings.
- Emergency Services: You may be surprised what a difference a nearby fire hydrant or quick response time from emergency services can make. If they are not nearby/quick, rates may increase.
- Traffic: High traffic areas bring in great business, but they also increase the likelihood of injury.
- Other Nearby Businesses: If you are by a place that serves liquor, produces fumes (dry cleaners), or has a high risk of fire, among other examples, you can expect premiums to be raised.
Of course, this is not meant to be an exhaustive list. If you get that nice waterfront location, for instance, that could raise premiums as well as require a flood insurance policy.
Keep an Eye on Matters
Assessing these premium costs is quite important. Put the following tips into effect to stay aware of some of these factors:
- Read your lease. The lease requirements are mandatory, and this will be an essential step to becoming aware of what you’ll need in coverage to avoid eviction.
- Enforce safety. Look for discounts for safe practices. Anti-crime measures, slip-proof flooring, and other safety methods. From parking lights to highly-viewable paint, you can do this inside and out of your business location.
- Comply with applicable codes and laws. This is a must. Ensure you are in line with building codes, laws, and standards in your area.
Put It Into Action
Even if you aren’t looking at new locations, you can make some changes to perhaps decrease premiums. Your agent or broker will be a point of contact to investigate, such as if particular changes would make a difference.
Of course if you are looking for a (new) business location, these elements can make a huge difference. Don’t be afraid to consider alternatives and consult your agent or broker. Get estimated premiums before considering how it will play into your decision – or worse, after you purchase a location.
In the end, insurance premiums are part of the cost of doing business. It is quite high in importance, when you think about it.
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