How much does commercial insurance cost?

By Leana Schwartz, Independent Commercial Insurance Agent

commercial insurance cost long beach independent commercial insurance agencyCommercial insurance is a must for any business — regardless of size, location, and industry — to protect property, equipment, inventory, and employees from loss or damage, as well as to protect the business from liability-related lawsuits. Obtaining the proper amount and type of insurance coverage safeguards a business against devastating financial losses that could threaten its continued survival.

Determining commercial insurance cost

Generally, commercial insurance premiums are based on the value of the structure and property to be insured, and the likelihood of a covered loss occurring. Businesses operating in higher risk categories or located in geographic areas with known hazards such as high crime rates or frequent floods, will generally be assessed higher premiums. For example, a 24-hour convenience store located in an urban center will generally pay more for the same amount of commercial insurance coverage than a bookstore located in a quiet suburban neighborhood.

Factors that influence commercial insurance rates


The building’s construction and condition have a direct impact on insurance cost. Buildings constructed of fireproof materials, buildings with fire-resistant interiors, newer buildings, and those with recent electrical or other system upgrades generally cost less to insure.

Protective factors

Businesses located near fire stations or fire hydrants and those with alarms and/or interior sprinkler systems generally enjoy lower commercial insurance rates.


How the premises are used also impacts the commercial insurance cost. For example, restaurants or vehicle repair shops have higher risks than many other types of businesses, and are charged correspondingly higher insurance rates. Similarly, if Company A shares the structure with Company B, a higher-risk business, then Company A will likely pay higher rates than it would if it shared the building with a lower-risk business.

Number of employees

As the number of people employed by a business increases, insurance premiums often rise.

Years of business experience

One frequently overlooked factor that can affect insurance rates is a track record of experience. Business longevity and stability can lead to reduced insurance cost.

Claims history

Prior claims don’t necessarily equate to higher premiums, but it is something insurance companies consider when writing a new policy.

Commercial insurance is an investment in the future

While the cost of commercial insurance might seem like a burden or an optional expense, proper insurance coverage is critical to the longevity and survivability of any business. Investing in commercial property and liability insurance will be much less expensive in the long run than incurring the costs of a catastrophic loss.

Looking for affordable commercial insurance to protect your business? Contact Long Beach independent insurance agency NHC Insurance Services. NHC serves clients in Long Beach and the greater South Bay area of Los Angeles, including Signal Hill, San Pedro, Wilmington, Lomita, Torrance, and surrounding communities.