Setting Premiums
Determining your insurance premiums depend mostly on the frequent perils or risks your business encounters on a normal basis. Understanding statistical risks associated with your line of business is the job of insurance providers and based on this assessment, they can adjust policies to provide for greater protection. The primary factor in setting premiums include building structure type, safety measures in place and the location of the property to various high risk areas.
Based on this information, basic rate is adjusted based on the discretion of the insurer basing it on history of claims or definite measures for loss control. Dividends are usually used, when rates cannot be adjusted, in order to reduce premium rates. Dividends however are not guaranteed and are only good when you actually have the check in hand.