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Commercial Property Disaster Insurance

Why You Need it Now

Disasters happen, forcing businesses to temporarily close and drying up revenue streams in the process. But expenses continue…and often rise significantly.

Preparing for disaster with an adequate insurance plan for your Commercial Property prompts the review of your business continuity strategies and recovery plans. Commercial Property Disaster Insurance is an essential part of a company’s blueprint for survival.

Disaster Survival Coverage

Following a major loss, there are lots of things that a business can do without, but revenue isn’t one of them. Most businesses underestimate the amount of time it takes to return to normal operations and costs can increase exponentially over time. Consider the following:

  • • Cause and origin investigations and debris removal can span 1-2 months.
  • • Securing permits can take 2-3 months (even longer in urban settings due to density and local authority).
  • • Reconstruction can take 7-12 months (longer for complex operations).
  • • Replacement of machinery and equipment can take 2-18 months (testing can add another 2 months).
  • The EPA and other regulatory agencies can create further delays.

“Each year disasters such as floods, hurricanes, tornadoes and wildfires force thousands of businesses to close. But even more common events, such as building fires, cause the same result. Our research shows that at least 25 percent of those businesses that close following events such as these do not reopen.” (Institute for Business & Home Safety)

Commercial property insurance rates continue to increase significantly as a result of industry and environmental factors, with catastrophe-exposed buildings with losses experiencing possible rate increases in the double digits.

Contributing factors:

  •      • Building Fires: An increase in fires is also having an impact on rates.
  •      • Material and Construction Costs: By the end of 2018, commercial construction building costs had risen 23.6%.
  •      • Labor Shortages: In 2018, construction costs rose 5.6%—the highest since the Great Recession, partly due to shortage of labor.
  •      • A Changing Society: Environmental factors and fraudulent behavior are changing risk management strategies and increasing rates.

Ways to Reduce Risks and Costs

While you can’t control all of the factors affecting commercial property rates, there are concrete steps you can take to help prevent risks and reduce costs.

  • Find the right space: Is your facility helping or hurting your property rates? Things like location, infrastructure, and security matter.

  • Start at the top: If you haven’t thought about your roof lately, now’s the time. Make sure to keep up with your roof maintenance and codes.

  • Assess and remove fire hazards: As the weather starts to heat up and wildfires are more common, remove potential fire hazards surrounding your building. Keeping regular maintenance on your electrical system and repairing faulty wires will also help reduce the risk of electrical fires.

  • Prepare for unexpected disasters: You can’t control the weather, but with smart preparation you can protect your employees, customers, and business. Implement disaster action plans for your business and stay safe.

Get the commercial property coverage you need

With costs on the rise, it’s critical to regularly review and adjust, if necessary, property insurance limits. Keeping values current can protect your business by providing the right amount of coverage to rebuild should a loss occur. 

Let Mainline Insurance help give you peace of mind as you go about working hard. 

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