Businesses need to take steps to control overhead costs associated with owning or operating commercial property. Insurance premiums can be considerable, and several different factors could affect the total amount of this important budget line item.
Location
A building’s location will have a significant impact on commercial property insurance premiums. Buildings that are located in a region that has severe storm seasons may have higher premiums due to their enhanced risk exposure. Likewise, carriers may perceive greater risk in properties situated in areas with high-crime rates.
Claim History
A business’ claim history under a current or prior commercial insurance policy could impact the cost of coverage. Carriers may consider several years of recorded claims, and the cost of individual claims can bear heavily on their analysis.
Activities
A property’s commercial use generally plays an important role in coverage terms and costs. A business whose activities are industrial or involve potentially dangerous equipment may have to pay a lot for coverage. In contrast, businesses whose activities are primarily administrative do not present considerable risk and will not command such high premiums.
Condition
A property’s structural integrity and outstanding capital needs may be relevant to coverage expenses. Some carriers may request to see building management plans.
Businesses should seek out competitive rates. Coverage should be affordable while also well-measured to mitigate risk.
