What are the most frequent perils your business may face? The answer to this question will affect your premiums. Insurers make it their job to understand the statistical frequency of major risks such as fire and theft, and policies can be easily adjusted to take into account greater amounts of protection.

The Insurance Services Office (ISO) provides insurers with basic premiums incorporating a number of factors to determine the basic risk of your property. The primary factors in setting property insurance premiums include the type of building structure, the presence or absence of protective safety measures, and the proximity of your property to other high-risk areas.

This basic rate is then further adjusted at the discretion of the insurer, who credits or debits based on claims history or specific loss-control measures. In states where rates cannot be adjusted, dividends are commonly used as a way to reduce premiums. Take note, however, that dividends are not guaranteed and should not be counted upon until you have the check in your hand.