Business Insurance: Are You Doing Business in a Risky City?

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Certain businesses are associated with higher risks than others and costs are determined based on those risks. Some risks are relative to the level of liability the business faces, while others face higher financial risk. Many types of businesses are automatically considered high risk due to the nature of their business, such as doctors and engineers.
Sometimes risk has nothing to do with industry, but everything to do with location. If you are doing business in a risky city, you could be facing a higher cost for business insurance. What qualifies as a city with high risk?
If your business is located in an area with higher crime, your insurance rates might be higher because of the number of claims for vandalism, robbery, and property damage are higher than normal in that area. Detroit, Michigan, for example, is a red flag for violent crimes and business owners in that location will pay a premium for insurance.
A business located in a hurricane or earthquake zone will have higher rates because the risk of filing a property damage claim is higher than in other areas. Cape Hatteras, North Carolina, tops the list for cities affected by a tropical storm or a hurricane. A business in that location would face higher insurance rates.
Insurance is important for all businesses, but if you operate a business in a risky city, the likelihood of you needing the insurance rises dramatically with your assessed risk. If you’re concerned about high rates or want to make sure your business has the correct coverage, call AAA today.

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