The commercial property insurance market has steadily hardened, resulting in rate increases every quarter since Q3 2017. Current market price forecast predicts a 12% increase for commercial property insurance premiums. Many insureds are experiencing double-digit rate increases, lowered available capacity and various policy restrictions or exclusions. This is especially true in regard to weather-event or COVID-19-related losses. High-risk operation policyholders with poor loss control practices or located in natural disaster-prone areas may encounter more severe rate changes, higher retentions and decreased coverage limits.
Commercial Property Insurance Trends to Watch
Every area of the country has been inflicted with natural disasters. Over 58,000 wildfires across the West Coast, hundreds of tornadoes in the Northeast and Southeast, a handful of hailstorms in the Midwest, the ice storm in Texas and a record-breaking number of hurricanes on the East Coast are just a few examples of recent catastrophic events. Expected to worsen in the upcoming years, these natural disasters often leave behind devastating property damage for property owners and businesses. Review our Disaster Preparedness Guide to ensure your business can recover and resume operations quickly and efficiently.
Civil Unrest Incidents
Occurrences of civil unrest are a reality in many communities throughout the country. They can create unique challenges for business owners and commercial properties and can leave businesses vulnerable to vandalism, stolen/damaged goods and property damage. Civil unrest can also force establishments to temporarily close or alter business hours to ensure employee and customer safety, resulting in lost income. Being prepared can help protect your business during periods of civil unrest.
COVID-19 and Property Coverage
Some organizations have been granted limited protection under their property insurance policies for losses stemming from pandemic-related business interruptions. Most businesses have encountered unresponsive policies due to either virus-related coverage exclusions or a lack of physical property damage. Physical damage is often a necessary policy trigger for business interruption claims. Many policies issued post-COVID-19 have incorporated specific exclusions for losses associated with communicable diseases or the pandemic.
Tips for Buyers
- Work with your risk manager to begin the renewal process early. Timely, complete and quality submissions are vital to ensure your application will be reviewed by underwriters.
- Collect and provide sufficient data regarding your existing risk management techniques. Collaborate with your risk advisor to verify the loss control measures you have in place.
- Conduct a thorough inspection of both your commercial property and the surrounding area for specific risk management concerns. Implement additional mitigation measures as needed.
- Address insurance carrier recommendations. Taking the appropriate steps to reduce your risks whenever possible can make your business more attractive to underwriters.
We Can Help
Our dedicated property and casualty team represents the full array of insurance carriers. Their knowledge and experience have earned the trust of many businesses across the nation. To learn more about your options, contact a member of our team today.