Does business insurance cost more?

If you want car insurance that pays for a wide range of damages, you have to pay more for it. The same rule applies to corporate liability insurance. If you want a policy with higher coverage limits, expect to pay more than you would for basic coverage. Commercial auto insurance isn't cheaper than personal car insurance.

Coverage for a commercial car is often more expensive because you run the risk of receiving greater liability and property damage claims when transporting people or goods for money. Commercial auto insurance also offers higher liability limits than personal insurance and provides protection against legal action that an injured party may take against your company after an accident. How much your policy will pay and under what circumstances it will affect the total cost of your company's insurance. Insurance companies use credit-based insurance scores, where allowed by state law, since studies have shown that these scores effectively indicate the likelihood that a driver will file a claim.

These figures were derived from an analysis of thousands of insurance policies purchased by Insureon small business customers. Usage-based insurance is a type of car insurance that calculates your premium based on your driving habits. The best way to get cheaper car insurance is to compare quotes from several companies and then switch to the insurance company that offers the coverage you want at the cheapest price. Rideshare drivers, such as Uber and Lyft drivers, have unique needs, and a growing number of insurers offer different rideshare insurance.

The cost of general liability insurance varies depending on business operations and policy limits, among other factors. For example, if your business is considered low-risk, you may qualify for a business owner's policy. Commercial property insurance protects your business from losses in the event of a fire, natural disaster, theft, or other problems. Workers' compensation insurance is even more specific and delves into the job role of each employee to determine the cost of coverage for a given company.

The following graphic illustrates how the type of business affects what you'll pay for a general liability insurance policy. The auto insurance deductible is an amount you must pay out of pocket before your insurer covers the rest. That's one of the reasons why the cost of professional liability insurance will be higher for an architectural firm that works in public buildings than for an insurance agent who works with individual clients. Insurance companies reward companies that are diligent about the safety of workers and customers, but harm companies that have a history of accidents, work injuries, or negligence lawsuits.

Here's an overview of how these costs are broken down and what factors influence rates the most when looking for the best insurance for small businesses. The best way to save money on your business insurance is to make very few claims against your policy.