Insurance is no different from any other product, or service you purchase; it has costs. These include costs for claims paid and various operating expenses. Typically, these loss costs are reviewed annually and may increase, or decrease depending on loss experience for your classification of business. Other factors having to do with your own business can help determine your rate. For example, your use of a formal safety program can earn you up to 25% off the cost of your insurance. Also, with our Claims-made policy, our costs are less during the first five years of coverage because of the way a claim is made (see “What is the difference between Claims-made and Occurrence?”). For this reason, your Claims-made premium starts out in year one lower than an Occurrence policy, but increases gradually through year five until it is roughly equal to an Occurrence rate. Your cooperation with audits, claims and your timeliness in paying installment premiums can all contribute to how much you pay.