Every day, your business is exposed to various risks that can result in significant financial damage. Having Commercial Property insurance will give you peace of mind that your company will be able to survive losses from different perils that are beyond your control. A risk management plan, that includes commercial property insurance, covers not only the premises themselves but also the contents, helping to ensure you can cover or offset the repair and/or replacement costs of machinery, stocks, fixtures, and fittings. 

Some of the perils covered under Commercial Property insurance include earthquakes, explosions, storms, fires, and vandalism.

Since no two businesses are the same, the coverage that one company needs to bounce back from a loss will be different from another. Here are some of the factors that influence the cost of Commercial Property insurance premiums:

1. Business Equipment - The age, the type of equipment your business has is taken into account during a Commercial Property insurance valuation. Older equipment might be less expensive to replace, but harder to source like-for-like. New and more specialised equipment might be more expensive to replace. 

2. Commercial Property Age - The age of your commercial property can influence your insurance premium costs. When the premises were built and how recently they were rewired may have an impact on the cost of Commercial Property insurance. Older buildings maybe more susceptible to fire, making them more costly to insure, or requiring you to undertake remediation works to meet the requirements of your insurance coverage.

3. Commercial Property Size - Whether you run an office space, factory, or retail space, typically, the larger it is, the higher the Commercial Property insurance premium will be.

4. Location - The location of your commercial property may impact your insurance premiums. For example, if your business is located in an area where commercial premises have had a high number of insurance claims, you may have to pay higher premiums.

5. Stock - The amount of stock that will be covered and its total value also affects the cost you will need to pay for Commercial Property insurance.

6. Security - The level of security resources you deploy can influence your commercial insurance premiums. Companies with premises that are secured with monitor alarms, deadlocks, CCTVs, and patrol officers may find that they are able to pay lower premiums than those that take little to no security measures.

7. Claim frequency and severity - The higher claim frequency of your business and the size and severity of any insurance claims you have made, can influence your commercial insurance premiums.

Claim frequency is how often claims arise, or put simply, how often do you attempt to claim on your insurance. Claim severity is the amount a claim costs the insurer, the size and significance of the insurance claim. Some areas of concern that can influence severity include whether your business use hazardous or flammable materials? How often your raw supplies or finished products are stolen? These are some of the questions that can help you determine claim frequency and severity.

1. Business Equipment - The age, the type of equipment your business has is taken into account during a Commercial Property insurance valuation. Older equipment might be less expensive to replace, but harder to source like-for-like. New and more specialised equipment might be more expensive to replace. 

2. Commercial Property Age - The age of your commercial property can influence your insurance premium costs. When the premises were built and how recently they were rewired may have an impact on the cost of Commercial Property insurance. Older buildings maybe more susceptible to fire, making them more costly to insure, or requiring you to undertake remediation works to meet the requirements of your insurance coverage.

3. Commercial Property Size - Whether you run an office space, factory, or retail space, typically, the larger it is, the higher the Commercial Property insurance premium will be.

4. Location - The location of your commercial property may impact your insurance premiums. For example, if your business is located in an area where commercial premises have had a high number of insurance claims, you may have to pay higher premiums.

5. Stock - The amount of stock that will be covered and its total value also affects the cost you will need to pay for Commercial Property insurance.

6. Security - The level of security resources you deploy can influence your commercial insurance premiums. Companies with premises that are secured with monitor alarms, deadlocks, CCTVs, and patrol officers may find that they are able to pay lower premiums than those that take little to no security measures.

7. Claim frequency and severity - The higher claim frequency of your business and the size and severity of any insurance claims you have made, can influence your commercial insurance premiums.

Claim frequency is how often claims arise, or put simply, how often do you attempt to claim on your insurance. Claim severity is the amount a claim costs the insurer, the size and significance of the insurance claim. Some areas of concern that can influence severity include whether your business use hazardous or flammable materials? How often your raw supplies or finished products are stolen? These are some of the questions that can help you determine claim frequency and severity.

Premises unoccupied for long periods of time can be more likely to be targeted by squatters and vandals, making their risk exposure higher. Fortunately, Commercial Property insurance may provide coverage for vacant commercial properties.

If you own and lease commercial properties, changes in your tenants’ occupations have an impact on your insurance premiums and even on your insurer’s willingness to cover your premises. In some cases, risk management professionals do not insure commercial spaces that are left unoccupied for over 90 days. This is why talking to an insurance broker and being transparent about your business operations is important.

For more information on Commercial Property insurance coverage and how it can help protect you from possible financial losses, reach out to an insurance broker via Advisr today.