Commercial refers to anything connected with commerce or business. As a result, commercial property claims are simply claims relating to the premise or physical structure from which the business operates. Commercial property insurance is typically more complex than residential property insurance. It is primarily due to the high cost of the premise itself, as well as the cost of appliances and other devices installed or stored inside the building. Then there are the workers. Overall, numerous things can go wrong and cause harm or damage to your business property. According to statistics, almost all businesses file some kind of claim within the first ten years of operation.
Use Caution When Purchasing Commercial Property Insurance
No business owner can ever predict what accident will cause damage to their commercial property. As a result, they must cover all bases, leaving nothing to chance. One must be prepared to deal with the financial implications of not only property loss but also work disruption. This is why commercial property insurance claims have a high dollar value. When purchasing the policy, use caution because you do not want any unpleasant surprises when a claim arises. If there is one guarantee in any business, it is that something will go wrong at some point.
The Most Common Commercial Property Insurance Claims
Now that we’ve gotten into the topic of claims, let’s take a quick look at some of the most common.
1. Theft and Break-in – No matter what business you are in, there is always the risk of theft, burglary, or break-in. It could be a disgruntled employee, an irate customer, a petty criminal, a random person under the influence of drugs or alcohol, or someone just having fun. However, the chances of such an occurrence are higher in a run-down or out-of-the-way neighborhood than in a busy one. Nonetheless, no place is ever completely safe. According to a survey, nearly 20% of start-ups or small businesses have filed a claim in the last five years.
If you want to reduce the risk of theft on your business premises, you should invest in a cutting-edge security system. The good news is that some insurance companies will give you a substantial discount on your premium if you are already doing it.
2. Weather Damage – Wind, hail, storms, hurricanes, and tornadoes can all cause significant damage to commercial property. The subsequent water and freezing damage only adds to the misery. Did you know that nearly 25% of businesses that close due to weather-related damage never reopen because they either failed to purchase adequate coverage or their insurance provider could not cover the massive loss?
If you operate your business in an area where such occurrences are common, make sure your insurance company covers them. Otherwise, you may need to purchase additional coverage.
3. Fire Damage – One of the most serious threats in any commercial building is fire. Every entrepreneur, however, takes reasonable precautions to avoid fires. Furthermore, they take precautions to ensure that it can be contained with minimal damage if such an event occurs. However, not everyone is always fortunate. It is possible that when a fire breaks out, no one is present to put it out, and the fire spreads. Even if the building is occupied, the danger posed by the fire is so severe that the premises must be evacuated immediately. During these times, fire has free reign and causes massive damage. As a result, fire claims are usually high-value claims.
The fire has no apparent cause. It could happen as a result of carelessness, a short circuit, lightning, and so on. Keep in mind that fire has the potential to wreak havoc, so you need adequate insurance coverage to get back on your feet despite the setback. Make certain that all fire safety rules and regulations are strictly followed, as a lapse on your part may result in the insurance company declining your claim.
4. Liability Claims – Accidents happen despite taking all necessary precautions, and sometimes because they do not. Though uncommon, these claims can occasionally involve significant public figures. For example, suppose a client comes to your location and slips and falls or trips over something. As a result of the injury, you may require hospitalization and surgery. As you are well aware, medical expenses are high, and as a result, the dollar value attached to liability claims is also high.
If you want to keep these claims to a minimum, make sure that everything is kept in place, the walk area is clear of obstructions, and all equipment, appliances, and fixtures are adequately secured.
5. Non-Theft Damage – Finally, there are claims that arise through no fault of your own. For example, a car crashes into your building, a ball sails through the large glass window and smashes it; a tree falls through the roof, etc. A variety of things could happen, and as a business owner, you must plan for these losses as well. Fortunately, such claims are uncommon and come at a lower cost.
All you can do to limit such damage is to place roadblocks around the premises so that they do not interfere with regular traffic while keeping your building separate. For windows and other similar applications, use tough fiberglass. Because of the sheer volume of such claims that they handle, your insurance company can make several suggestions.
No business owner wants anything bad to happen on or around their property. However, one cannot control everything. An unexpected incident may occur, necessitating the filing of a claim. As a business owner, you must ensure that the commercial property insurance coverage you purchase is adequate to cover the cost of these incidents and accidents. Safety enhancements will help to mitigate the resulting damage, but they may not provide you with a premium discount. As a result, before investing heavily in such upgrades, check with your insurance company.
Contact the experts at Trusted Public Adjusters if you need assistance filing a claim or want to discuss the commercial property insurance coverage. We will gladly assist you.