Does the Location of Your Business Affect the Rate?


When you own a business, protecting it with a variety of different insurance policies is essential. Even if you run your business from your home, you need to be sure and have adequate insurance coverage. There are a lot of things that can affect your business insurance rate, from your credit rating to the type of coverage you want. Your location can also affect how much you pay. Here are some things about your business location that affects your insurance rate.

Climate, Weather, and Natural Disasters

If your business is located somewhere that has a mild climate and excellent weather throughout the year, you’re in luck because you will most likely pay less than a business owner who is in a state with a lot of icy winters and heavy rain. You have less of a risk of a flood from the inclement weather, therefore you are less of a risk in the insurance company’s eyes. You may also pay more for business insurance, particularly citizens property insurance if your business is located somewhere that gets a lot of hurricanes, earthquakes, or tornadoes.

Crime Statistics

Do you work somewhere that has a higher crime rate based on recent statistics? If so, you might be paying a little more for certain business insurance policies. Businesses in high-crime areas are at a greater risk of theft and vandalism, therefore your policy is often at a higher rate. Check the crime rate in your area and compare it to other nearby communities. If you are located in a downtown area, there is probably a slightly higher rate of thefts.

Nearby Traffic

One of the more surprising ways your business location affects your business insurance rate is with the nearby traffic. Working in an area that gets a lot of vehicle traffic potentially puts you at a greater risk for injuries and accidents. It has the greatest effect on your commercial auto insurance policy since you are at a higher risk for getting into a collision.

Available Emergency Services

Some commercial insurance companies look to see if there are emergency services available in your area. This includes a hospital or urgent care, police department, and fire department. Is there a fire hydrant right outside your building or is it down the road? These are things that affect your risk and, therefore, affect your insurance rates. If your business is down the street from a fire department, you will get a faster response if you get a fire in your building, which reduces the damages. This helps to keep your insurance policies a little lower.