Glossary term
What is Insurance premium?
Short answer
An insurance premium is the price you pay, monthly or yearly, to keep an insurance policy active.
Insurance premium, explained for tree service owners
For a tree company, premiums are a fixed business cost, like truck payments. They depend on payroll, the kind of work, your claim history and your limits. Climbing and crane work usually cost more than ground work. Do not choose a policy on price alone, because a cheap policy may leave out things that matter. Add your premiums to your overhead when you set prices, so every job pays a share. This is a short explanation, not insurance advice. Get quotes from more than one agent.
Related terms
- Overhead
Overhead is the ongoing cost of running a business that is not tied to one job, such as insurance, office costs, phone plans, software…
- Break-even price
Break-even price is the lowest price for a job that covers all of its costs with no profit left over, found by adding direct costs and a…
- Gross margin
Gross margin is the share of revenue left after paying direct job costs, such as crew labor, equipment, fuel and disposal, but before…
- Markup
Markup is the amount added to a job's direct cost to set its selling price, usually shown as a percentage of cost, such as 40 percent…
- Net margin
Net margin is the share of total revenue kept as profit after every cost of running the business, including overhead, has been paid.
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