Insurance premiums for small business insurance in New Jersey are calculated using a variety of factors. Understanding these elements is important in determining the cost of business insurance. The three factors that are commonly considered are the value of the business being insured, its business classification and the rates assigned to the business classification.
Assets and Value Play a Role
Business insurance premiums are often partially determined by the annual sales of a business, the amount of space occupied, and the projected annual payroll for the enterprise. All of these are elements in determining the value of a business, which must be known to find out how much coverage is necessary.
Often, businesses with similar operations have similar risks and similar types of claims against their insurance. Therefore insurers will charge these companies similar rates. Hundreds of categories are used by insurance agencies to determine the classification of a business. Each enterprise will be assigned a classification depending on the type of operations conducted.
Each insurer will have rates that can vary greatly for each classification. Rates may be developed using internal data or based on independently aggregated information. A business receives more than one classification, especially if it offers multiple services, which can impact the rates received.
Small business insurance in New Jersey is necessary to protect the assets, employees and customers of any business. Contact an expert in issuing insurance in your industry to find the best rates.