Expenses

What Does Expenses Mean?

An expense is any item or service on which money is spent. In the context of insurance, it typically refers to the amount a policyholder pays in premiums to maintain coverage over time. For example, if a business makes three payments of $3,000 each quarter for liability insurance, its liability insurance expense for the quarter would be $9,000. That coverage would most likely be sold as general liability insurance, which protects the business against third-party injury and property damage claims.

Insuranceopedia Explains Expenses

Insurance is considered an expense for businesses because they must pay premiums to receive and maintain coverage. As long as the business continues to pay these premiums, it will retain its insurance coverage. However, if it fails to make these payments, the coverage may be terminated. Because premiums vary a lot between insurers, business owners often get quotes from several providers when they compare business insurance options.