Tag Archive for: Commercial Property

water leak, flooding a room with a wood floor, a couch and windows.

ensuring your business has appropriate water damage coverage

You might be looking at the title of this article thinking… “Why does my business need water damage coverage?”

Well, contrary to popular belief, water damage is one of the leading insurance losses, and can greatly impact your business. In fact, water damage is the second most common insurance claim for businesses. 

This considered, it’s important to take the proper steps to mitigate the high risk of water damage by having the proper insurance coverage.

does my insurance include water damage coverage? 

It’s important to have the right kind of business insurance for your commercial property. You want a policy that includes commercial water damage coverage.

The types of water damage claims covered by some commercial property insurance plans include:

  • Pipe breakage
  • Groundwater, and
  • Backed-up sewer lines

However, many policies exclude coverage for external flooding and mold-related damage.

For some insurance plans, you can purchase additional protection to your property policy to gain more coverage. There are also other types of insurance policies—for example, commercial flood protection or business interruption insurance—that can help safeguard your business from loss of income if your business has to close due to flooding or water damage.

what qualifies as water damage?

Commercial water damage is the destruction that a water-related issue can cause to your commercial property.

Damage can range from a corroded pipe bursting, a defective or improperly installed fitting can leak, and failed heating systems. All of these damages can result in major non-weather-related water disasters.

Common kinds of commercial water damage can come from many sources on the property. Always monitor your building to be aware of the areas where water damage can occur so you can be prepared if it does.

monitor your building

Pay careful attention to these parts of your property:

  • Roofs require maintenance to prevent damage from the elements
  • Pipes can easily leak or get damaged from extremely cold temperatures or old age
  • HVAC system can also leak or break due to a lack of maintenance or overuse

why is water damage not included in my property insurance?

Commercial property insurance commonly covers the loss of or damage to a property owned by a business. The damage that is covered includes:

  • Fire
  • Wind
  • Lightning
  • Explosions
  • Theft, and
  • Vandalism

However, most commercial property insurance does not include water damage. That’s why it’s important to know what your policies cover. Flood insurance is actually covered under a separate policy and can be purchased separately.

reach out to benchmark commercial insurance

Water damage is typically affected by the weather or a natural disaster that can create damage to your property—even with preventative measures, you can’t always control what happens.

Having a proper disaster plan, a building with adequate drainage systems, and regular maintenance and inspection schedules will help prevent damage and accidents.

Having a water damage insurance policy provides you coverage to help with the financial liability costs due to water damage. To find out more about water damage insurance and property insurance reach out to us or read on about why water damage is a top insurance loss.

man at desk with insurance building blocks

why is your commercial property premium increasing?

‘Why is my commercial property premium increasing?’ As a property owner, this is likely a question that you’ve had top of mind lately. There are many factors driving rates up right now.

Let’s discuss the reasons why your commercial premiums might be increasing, as well as what you can do to counteract these surges.

factors that are driving up commercial property premiums

What factors are driving rates?

the global pandemic and subsequent economic uncertainty

Pretty self-explanatory—and expected!

increase in natural catastrophes that occur

From rising global temperatures to cyclones, hurricanes, tornados, and tropical storms, there has been an increase in not only the frequency of natural catastrophes but also the severity of those events.

increased costs 

Second, you have to address the cost to rebuild after such a catastrophe. In most cases, the cost to rebuild often exceeds tens of billions of dollars depending on the damage done.

In addition to this, the cost to rebuild right now is sky high due to:

  • Price inflation of materials
  • Labor shortages, and
  • Supply chain issues

Companies at high risk of natural catastrophes (i.e. tornadoes, hurricanes, hailstorms, and wildfires) are seeing the highest rate increases, as well as non-renewals and difficulty securing coverage. In fact, in wildfire areas of California and wind zones of Florida, rates have increased by over 20%.

what can commercial property owners do to reduce premiums?

When it comes to battling increased commercial premiums, risk mitigation is your golden ticket.

Property owners who have been working hard to mitigate risk and decrease claims are likely to receive more favorable terms and conditions—and possibly lower rates.

So what steps can you take as a property owner to mitigate your risk and therefore lower commercial premiums?

review your policies (before they expire!)

Did you know that, according to research, commercial properties were undervalued for underwriting purposes by more than 30% in November 2021 policies annually?

The solution to undervaluation? We recommend more frequent, in-depth property risk appraisals, that take the following into account:

  • Extreme weather events
  • Potential supply chain hurdles
  • Inflation trends

take control of your insurance narrative

Don’t leave your insurance narrative to underwriters. Instead, partner with your insurance broker and/or risk representative(s) to reduce risks wherever possible.

Property owners might consider taking a look at the elements below to create the most favorable underwriting profile, which then leads to the most favorable terms, conditions, and pricing:

  • Take inventory of assets
  • Identify current exposures and cost drivers
  • Tailor contracts to the current environment
  • Revisit existing risk management techniques
  • Highlight business continuity plans and loss control measures in place
  • Build a company culture focused on safety
  • Manage claims efficiently
  • Be weather-ready

Remember, underwriters are more critical of property (now more than ever!). You should anticipate them to ask in-depth questions about what you’re doing to control your risk for employees, tenants, and visitors.

As a property owner, it’s important to ensure your property is adequately protected against water damage. (Trust us, it’s no joke!) Read on to learn ​​why water damage is a top insurance loss.

infographic of why your commercial property premium is increasing