Depending on how much your business earns, you’ll need different levels of insurance coverage. This is why you’ll need to provide your business income when you buy commercial insurance. Calculating this number accurately will help ensure you’re getting the right amount of coverage for your unique business and needs.
Here are some tips for calculating business income for a commercial insurance policy.
Calculating Business Income for Commercial Insurance
This starts with a simple equation: Business income = revenue – expenses
- You need to start by calculating your business revenue.
- Then, you’ll subtract your business’s expenses and operating costs from total revenue.
- This gives you your business’s earnings before tax.
- Now it’s time to subtract taxes from this number.
Finally, you’re left with your business’ net income. Using this number, you can predict your expected revenue for the upcoming 12 months and make sure you get enough commercial insurance.
What Does Commercial Insurance Cover?
It’s important to have enough commercial insurance because without it, you could be left paying a number of hefty bills on your own.
Here are some of the things commercial insurance can cover in the event of a loss, a shutdown, or other unexpected circumstances:
- Utility bills
- Taxes
- Payroll
- Lost profits
- Property rent or mortgages
There are also a number of types of commercial insurance meant to cover different things for business not related to shutting down. For example, if your business uses vehicles for their operations, commercial auto insurance is a must.
How Much Does Business Insurance Cost?
Because commercial insurance policies vary so widely from business to business based on their needs, so do the costs of these policies. For example, if your business earns $100,000 per year and only uses one vehicle for its operations, it will likely cost less to insure than a multi-million dollar business with a fleet of vehicles to insure.
No matter what kind of business you own and what kind of coverage you need, Fargo Moorhead Insurance is here to help! Call us today so we can find you a policy with the coverage that’s right for you.