In their day-to-day activities, all companies have to deal with risks of different types. In view of this situation, one of the main instruments available to organisations to limit the impact of theft, fire, accident or any other type of unexpected incident is to have company insurance.
Many business owners and managers therefore want to know: How much does an insurance policy cost a company? Although the issue is complex and there are numerous possible answers, we will try to give some guidelines.
The price of insurance for companies depends on many factors
The first thing we have to consider when calculating the annual budget we must allocate to insuring a company is that we are almost certainly going to have to take out more than one insurance policy, as there are different types in the market, and for many activities some of them are compulsory.
Civil Liability Insurance
Although Civil Liability Insurance is compulsory for many companies, depending on their activity, it is highly advisable for all companies and self-employed workers, as it protects them against claims for compensation from employees and third parties related to their activity.
The premium for this type of insurance is very variable, depending basically on the following factors:
The type of civil liability insurance and cover included.
The capital covered, which we refer to as the sum insured and is the maximum amount for which the insurer would cover compensation.
The type of business or professional activity.
The number of employees.
The turnover of the business.
According to data published by ICEA, the average premium for Civil Liability Insurance in 2019 was €575 .
However, the premium can be much higher depending on the activity and size of the company, as well as the capital insured. The more workers the company has and the higher its turnover, the more expensive the insurance will be.
Multi-risk policies cover a wide range of damage, accidents and incidents that affect companies and businesses in general relatively frequently: theft, fire, machinery breakdowns, flooding, storm damage and other weather conditions, etc.
In addition to Civil Liability Insurance, many companies take out a multi-risk policy, because it offers good cover for the most common incidents.
Prices are very variable, the most influential parameters being the building materials used, measures to prevent fire and theft, the activity in which the company is engaged, the nature of goods stored indoors, the premises, and their contents (furniture, machinery and other items covered).
The premium is thus determined in each case according to the nature, size and value of the elements to be insured. A small business or company can take out a multi-risk insurance policy for approximately €400.
Another type of insurance policy currently in great demand by companies is cyber-risk insurance, so that they can protect themselves from attacks using viruses, malware and other methods, which have become increasingly common.
The losses caused by a cyberattack can be very serious, affecting various areas of the company: loss of confidence and credibility, claims for data theft, fines and administrative sanctions, direct economic damage due to the company’s inability to operate with certain systems and applications, its website and online store, etc.
Everything depends on the size and activity of the company and the risks, cover and services they wish to contract. Some insurers include preventive measures and safety audits that increase the cost of the policy. Generally speaking, you can take out this type of insurance from €350 for a basic policy.
In addition to the above policies, most companies, including SMEs and many small businesses, need to take out complementary insurance, such as:
Accident insurance for employees. This will cost approximately €800 for a company with around 10 workers.
Vehicle Insurance: Between €300 and €1,000 per insured vehicle, depending on whether the policy is third-party or comprehensive, with or without excess.
By taking out company insurance, organisations can feel supported and protected against possible damage and risks. Given the large number of insurance companies and the range of policies and prices, it may be advisable for companies to use the services of an insurance broker, who will provide advice and assist them in contracting the most suitable products and dealing with the relevant procedures.