As a business owner, you’re constantly watching the bottom line and looking for good deals.
Various risk factors impact the cost of property insurance – like the location, type of business, the building’s construction makeup and exposure to nearby risks. We’ll work with you to help lower your risk and design complete property insurance coverage to meet the needs of your business.
How are commercial property insurance rates determined?
Typically, insurance premiums for commercial properties are set by multiplying the value of the building and its contents by a value that correlates to level of risk. Most of the time, properties with high risk have higher property insurance rates, while lower risk properties cost less to insure.
These are the variables that help determine your insurance rate:
The materials used in your building’s construction and its overall condition will impact your commercial building insurance rates. Buildings made of more fireproof materials (brick or stone) or those with fire-resistant interior floors, walls and doors cost less to insure. Newer buildings, or those with recent upgrades of electrical wiring, plumbing or the HVAC systems also usually cost less to insure.
The use of the premises will impact the property insurance rate. A restaurant or auto repair shop is more likely to have higher risks associated with that business than a florist shop, and may cost more to insure. And if your business shares space with a higher risk business, your premiums may increase.
When your business is located in an urban area with a fire hydrant or fire station nearby, your property insurance rate could be lower. An alarm or sprinkler system in your building can also help lower your rate.
Exposure to risk in the surrounding area – such as known criminal activity or the likelihood of loss due to accidents or natural disasters – can impact your insurance rates. Neighboring businesses could also impact your rates – for example, if your business is located near an oil refinery or fireworks factory, your property insurance rates may be higher.
Want to know more?
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