Important Commercial Property Insurance Variables to Be Aware Of

Business owners are encouraged to carry multiple types of insurance to stay protected. Operating a business is generally unpredictable, as there are unique risks to navigate daily. One emergency could jeopardize everything that you've worked for. To assist you in finding the right insurance to protect your assets, here is a look at some important variables that influence commercial insurance rates.

Size of the Business Being Insured

One of the significant factors in determining commercial property insurance costs is the size of the premises. Generally, larger spaces and those with heavy traffic cost more to insure than smaller commercial properties. However, there are some inverse situations. For example, finding affordable coverage for a large building that hosts a few items would be easier than covering a smaller office space packed with many high-tech gadgets.

The Building's Age

Building age is a key variable because older buildings are generally more expensive to insure. Signs of natural wear and tear are common in older buildings. Insurers recognize that older buildings will likely have expensive repair or replacement costs if something goes wrong.

Location

The location of a business also impacts commercial property insurance costs. Insurers will assess the recent crime data in the city and state where you plan to operate your business. Your commercial insurance premiums will be higher if you are operating your business in an area that has high crime rates. Insurers also note that there are some areas where the demand for commercial insurance raises premiums. It's recommended that you look for an area where your business can stand out from the competition which will help lower your premiums. Another way that you can avoid high commercial property insurance costs is by operating your business in areas with low crime rates, and the probability of a natural disaster occurring is low.

Equipment

The age of your equipment is another important variable to consider. Insuring older equipment is expensive because finding replacement parts and repairing it could be difficult. However, ensuring high-tech or luxury equipment can be expensive as well. If your business utilizes heavy equipment, your commercial insurance premiums will be higher due to the potential risks of using the equipment. A small mistake may cause the equipment to injure someone or cause significant property damage accidentally. Replacing stolen equipment is another potential issue insurers want to avoid, which raises your premiums.

Commercial Insurance Coverage Options

Opting for full coverage automatically raises your commercial property insurance costs. Most businesses opt for insurance that reimburses them based on current market value, which leads to higher premiums. However, opting for Actual Cash Value is an alternative to consider if you're operating a small business. Insurers use natural depreciation when reimbursing you for your commercial property. This type of coverage is less expensive than market-value replacement coverage. Amending your policy to add extra coverage, such as business interruption and umbrella insurance, also increases your premiums.

Consult with Fuller Insurance Agency!

There are a lot of variables that affect commercial property insurance rates. If you have any questions about coverage, contact the team here at Fuller Insurance so we can help you find the right policy to protect your business.