Commercial Property Insurance
Highly-Publicized Examples of Commercial Property Insurance at Work
- A commercial property owner in Houston filed a lawsuit against the Twin City Fire Insurance Company (Hartford) after its insurance was wrongfully denied. According to the lawsuit, Twin City’s claims-handling process resulted in a wrongful denial that omitted a wealth of facts, physical evidence, obvious wind damage, and meteorological data from Hurricane Harvey supporting the plaintiff’s claim.
See: Houston Commercial Property Owner Files Hurricane Harvey Damage Insurance Lawsuit
- A car crash into a utility pole caused a fire at a Naugatuck pizza restaurant. A Toyota Scion driven by a 27-year-old man hit a guide wire then a utility pole. As a result of the crash and the damage to the utility pole, a fire broke out at Mario’s Pizza.
See: Car crash into utility pole causes fire at Naugatuck pizza restaurant
- A massive Apple data center in Mesa, Arizona caught fire. The fire was limited to the roof-mounted solar panels above the building, prompting 50 workers at the plant to evacuate. These panels were part of a deal Apple had with the local community to provide power to 14,000 local homes.
See: A huge Apple building in Mesa, Arizona was just on fire
- A fire damaged or destroyed about 50 boardwalk businesses in the adjoining neighborhoods of Seaside Heights and Seaside Park. A five-block area went up in flames, including many local businesses that had only recently recovered from Hurricane Sandy.
See: Jersey Shore Fire a Reminder of the Importance of Having a Tight-Knit Business Community
Commercial Property Insurance Costs
How much can you expect to pay in rates? Frankly, there is no easy one-size-fits-all answer to that question. The cost varies dramatically depending on the characteristics of the property to be insured (COPE), the protective safeguards of the building, and the level of coverage you want.
Other factors can come into play as well, depending on how they increase or decrease your risk level. For instance, if your building was constructed using high-quality, fire-resistant materials, you’d pay less. If your building was equipped with the latest sprinkler systems, alarm systems, and other protections, those elements would also lower your risk, thus decreasing your rates.
Of course, some risk factors are harder to control. If you’re based in a high-crime area, you pay higher rates. Similarly, what your neighboring businesses do might also affect your rates. If you’re located right next door to a business that works with flammable materials, it amplifies your level of risk, which in turn spikes your rates.
Your most significant risk factor, though, is usually the business itself. What your business does, the amount of property you need to insure, and the dollar value of that property are the factors that are going to dictate the ballpark cost of your rates. For example, a factory is going to cost a lot more to insure than a run-of-the-mill office, since there’s a lot more expensive equipment to cover.
To recap, generally, these are the main factors that are going to impact the cost of your commercial property insurance policy:
Geography: Where your business is located, what the land value is, how high or low the local crime rates are, and whether natural disasters are common in your area.
Safety: Does your business or a business located close to it use hazardous or flammable materials? How much have you invested in protecting it?
COPE Data: Looking at the state of your building and equipment – how old and in what condition are they? When was the last time the electrical wiring was checked or changed in your building? In the case of an accident, how much money would it take to rebuild your building to code? How old is your equipment and how hard is it to repair the equipment? Is it easy to find parts for your equipment?
According to a recent report on property insurance, the impact of recent natural disasters will greatly affect commercial property rates in the coming years, particularly when it comes to property and assets located in areas at risk for wildfires, floods, and hurricanes, especially when for multifamily properties.
Whether you’re purchasing insurance for a new business or trying to lower your rates by improving your building with new safeguards, it’s important to understand all the variables discussed above.
Having quality, comprehensive protection for your building and all your property is essential if you are going to avoid expensive property replacements. From fires and burst pipes to high winds and hurricanes, your insurance policy will provide the protection you need to do business while maintaining peace of mind.
With that said, you can easily overspend on business property insurance if you aren’t sure exactly what you need, or don’t know what steps you can take to lower risk levels and costs.
Now that you have a better understanding of commercial property insurance, you may be wondering how all of this affects your business and where to go from here. If you need more help or information you can reach out to our team of expert brokers. If you prefer to get started on intelligent quotes, you can get started by creating an Embroker account today.
Having a quality commercial property insurance policy in place and a broker who can help you navigate the terms and conditions, as well as the claims process, can save you money and, more importantly, time.
Embroker is the easiest way to intelligently insure any business. We’re here to help!