How Your Business Location Affects Your Insurance Rate

Business insurance is essential any time you own a business, as it helps you to protect your assets from unexpected events. However, the rate of your insurance can vary based on a number of factors. One of those factors is the location of your business. Everything from the local crime rate to the risk of natural disasters can change your insurance coverage and how much it costs. Here are some things to know about your location and insurance rate.

Crime Rate

Your geographical location is one of the biggest location factors affecting your insurance rate, mostly because of the crime rate. If your business is in a downtown area or large urban area, there is probably a higher crime rate than your local suburban location. Because of the higher crime rate, you are at a higher risk of vandalism or theft, which requires you to pay a higher insurance premium.

Weather and Natural Disasters

For business property insurance and liability insurance, the local weather and natural disasters are another location factor for your insurance rate. If your business is located somewhere that frequently gets earthquakes, hurricanes, or tornadoes, your business it is a greater risk of property damage, therefore increasing your risk and increasing your insurance rate. The same thing can be said for the weather. Working somewhere that gets a lot of rain or snow puts you at risk for water damage.

Nearby Emergency Services

The insurance company will also look at your location to see if nearby emergency services are available. They want to know if there is a fire hydrant nearby, if you have close access to medical facilities, and if the fire department is in your vicinity. If you are in somewhat of a remote location where these services require a longer drive, you are once again at a greater risk of damage, therefore increasing your insurance rate.

Local Traffic

When you work in a location that gets a lot of foot or vehicle traffic, you become a high-risk business. This is because the more traffic there is, the higher the risk for various types of injuries. If you are in a busy shopping center or in a crowded urban development, you might be paying more for business liability insurance than if you were located in a small town.

Local Businesses

Other businesses around yours can also change the business insurance rate. You may not be at risk on your own, but if you are next to a dry cleaners, there is a higher chance for toxic fumes. If you are close to a business that produces paper or wood products, they have a high risk of fire, which means you do as well.