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Cracking the Code: Factors Influencing General Liability Premium Cost

Navigating the business insurance world can feel overwhelming. General liability (GL) insurance is a crucial component of any business strategy, but the cost can be a mystery. Let’s continue reading to crack the code of general liability premium costs, empowering you to make informed decisions for your business.

What Factors Affect the Cost of General Liability?

Several factors influence the cost of your general liability insurance premium. Here’s a breakdown of the key players:

Your Business:

  • Industry: Certain industries are inherently riskier. For example, a construction company will likely pay more than a bakery.
  • Size: Larger businesses with more employees pose a greater risk, leading to potentially higher premiums.
  • Location: Areas with higher crime rates or natural disaster risks can see premium increases.
  • Operations: Businesses with a physical location open to the public or involving potentially hazardous activities will typically pay more.

Coverage Details:

  • Limits of Liability: These determine the maximum amount your insurance company will pay for a covered claim. Higher limits equate to higher premiums.
  • Deductible: This is the amount you pay out of pocket before insurance kicks in. A higher deductible lowers your premium but means you’ll shoulder more financial responsibility initially in the event of a claim.
  • Claims History: Businesses with a history of claims can expect higher premiums, as they are statistically more likely to file future claims.

How Can You Influence Your General Liability Premium?

While some factors like industry and location are outside your control, you do have ways to influence your general liability premium. They are:

  • Improve Your Risk Profile: Implement safety measures to minimize accidents, injuries, and property damage on your premises.
  • Maintain Good Records: Document safety procedures, employee training, and incident reports. This demonstrates a proactive approach to risk management, which can be appealing to insurers.
  • Choose the Right Coverage Limits and Deductible: Analyze your potential risks and financial resources to determine the optimal balance between coverage and affordability.

What Is a Premium Audit?

A premium audit ensures you’re paying the correct premium based on your actual business operations. Your insurance company may conduct a periodic audit to verify your reported revenue or payroll (which can affect your premium). By maintaining accurate records and collaborating with your insurance agent during an audit, you can avoid any surprises.

Lower Your General Liability Premium with McCarty Insurance Agency

At McCarty Insurance Agency, we take pride in helping businesses like yours navigate the complexities of insurance. Our experienced agents will work with you to understand your unique needs and develop a tailored general liability insurance solution. We’ll help you crack the code of premium costs and ensure you have the right protection at an affordable price. Contact us today to build a secure future for your business. Call us at (559) 324-1421 to get started.

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