One of the fundamental commercial insurance coverages, commercial property insurance protects commercial property from such perils as fire, theft, and natural disasters. A variety of businesses, including manufacturers, retailers, service-oriented businesses, and not-for-profit organizations carry commercial property insurance. If a business has any kind of property, it’s a safe bet that the organization will need commercial property insurance.
Just as not all businesses are the same, not all properties are the same, and both of these can have a major influence on how much commercial property insurance an organization needs. Let’s take a closer look at what can influence your commercial property insurance needs.
Commercial Property Insurance: The Basics
Commercial property insurance essentially provides the same kind of protection as property insurance for consumers. However, businesses can usually deduct the cost of commercial property insurance premiums as expenses.
When determining how much a company should pay for commercial property insurance, the value of a business’ assets, including the building, is the primary factor. Provide an inventory of physical assets located on the property to your private client insurance services to help determine what exactly would be the replacement value and the level of coverage to obtain.
With an increase in the number of natural disasters, weather conditions in the area where the building is located have also become an important factor in determining commercial property insurance costs. Commercial insurance rates are generally higher for properties located in the vicinity or inside geographies with a significant risk of weather-related catastrophes.
Other Factors
There are a few additional features and circumstances that can influence commercial property insurance. They are:
Location
Buildings in cities with excellent fire protection typically cost less to insure than buildings outside a city or in areas with limited fire protection.
Construction
Buildings made of potentially combustible materials will have higher premiums, while those made of fire-resistant materials could earn a discount. Additions to an existing structure and internal structural elements can change a fire rating. Using wood partitions, floors, and stairways in an otherwise fire-resistant building will likely nullify any rate reduction. Fire-resistant interior walls, floors, and doors can help.
Occupancy
A building’s use also affects its fire rating. An office building will likely rate better than a restaurant or auto repair shop. In a building with multiple tenants, one hazardous occupant will negatively affect the fire rating of the entire building. If a business uses a building with a more hazardous tenant, premiums will be higher.
Fire and theft protection
How far are the nearest fire hydrant and fire station? Does the business have a fire alarm, sprinkler system, or security system?
You may also want to consider insuring your office equipment, accounting records/essential company documents, manufacturing or processing equipment, inventory kept in stock, landscaping, signs and satellite dishes. Commercial property insurance can be used to cover a variety of situations. For example, it can be used to claim damages if a fire destroys your office equipment. Commercial property insurance is also useful in case of a theft. It can also be used to make claims in case of a natural disaster.
About Haughn & Associate
Founded by Michael Haughn in 1986, Haughn & Associates is a full-service, family-owned, independent insurance agency based out of Dublin, Ohio. H&A strives to provide the best possible price and unique insurance solutions across a myriad of industries, including construction, IT, Habitation & Commercial Property, Agriculture, and Engineering. Devoted to providing the best of business insurance, life and disability insurance, personal insurance, employee benefits, and bonds, H&A is proof that success lies in long-standing client relations and satisfaction. To learn more about how H&A can be of service to you, contact us at (877) 802-2278.
