Understanding and Projecting Commercial Property Insurance Costs

Commercial property owners need to budget for property insurance costs accordingly. A number of general market factors can affect premiums, and there are multiple variables unique to each property that can impact the availability and expense of coverage.

Claims History

Loss reports have a big influence on carriers’ premium assessments. Multiple low-value claims or single high-value claims could cause carriers to identify a property as high-risk. 

Generally, pending claims do not result in a sudden increase to premiums. However,  they may weigh against a business when they are renewing or procuring a new indorsement.

Geographic Risks

The location of a property can create a higher risk of damage. Being situated in a high-crime area or a region that experiences severe weather events can make the cost of commercial property insurance premiums run higher than average.

Building Management

The upkeep and management of a building affects its insurability. A comprehensive maintenance plan assures insurance providers that a building is getting the preventive care it needs to withstand reasonable wear and tear. Good access controls and an effective surveillance system can show that a business is taking the right steps to secure the premises. 

Businesses must seek out property coverage that is sufficient to meet its unique risks and offer adequate remedies for property damage and loss.  

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