Commercial Property Insurance Cost Analysis

A Detailed Overview for 2023

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As a business owner, commercial property insurance is an expense that you’ll probably have to deal with. It’s important for you not only to understand the cost beforehand but also to know why your premiums may vary from year to year. Commercial property cost analysis guide is intended to provide you with the basic information you need to know when purchasing your coverage.  

What You Need to Know 

  • Average Cost of Commercial Property Insurance  
  • Factors Affecting Commercial Property Insurance Rates 
  • Commercial Property Insurance Discounts 

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Average Cost of Commercial Property Insurance in the U.S. 

Prominent insurance carrier Hartford researched eight different industries to determine an average median cost of $662 for commercial policies. They point out that rates may vary depending on the size and value of your business. For example, a medium-sized company will spend between $1,000-$5,000 per year for property coverage while larger firms can expect annual costs of tens or even hundreds of thousands of dollars annually. At minimum, these estimates include just one million dollars’ worth of risk. 

commercial property insurance cost analysis

2022 Commercial Property Insurance Market Outlook

According to the property market outlook report from Risk Placement Services, commercial property insurance buyers can expect:

  • A 5% to 15% increase in commercial property insurance.
  • Higher deductibles on selected catastrophes events such as wildfires and tornadoes
  • To get full limits on a property portfolio of $10 million or more, you will need multiple insurance carriers to share in the risk.

Factors Affecting Commercial Property Insurance Cost 

Property insurance can be difficult to put a price on, but it’s important for any business owner. The different types and amounts of coverage are all essential in protecting your assets from loss or damage that may occur during operation time!  

The following are some of the factors that affect the cost of commercial property insurance: 

  •  The type(s) and size(s) of buildings where your company operates 
  •  What is done or manufactured inside the commercial space 
  • The age of commercial property 
  • Whether any unique features (such as swimming pool, historic designation,) or items are located on the premises. 
  • Your company’s equipment, computers, and furniture  
  • The amount of coverage you need 
  • Your chosen deductible amounts 

The value of your commercial property will also be taken into consideration as this will typically dictate the amount of coverage you’ll need. 

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Commercial Property Insurance Discounts 

Insurance carriers in the United States tend to specialize in different types of commercial property insurance. For example, some carriers focus on office buildings, while others focus on retail properties. This specialization allows each carrier to develop a deep understanding of the risks associated with a particular type of commercial property. As a result, each carrier is able to offer tailored discounts based on their unique understanding of the risks involved. This means that businesses can save money by shopping around for the commercial property insurance that best suits their needs. 

The types of discounts offered by most of the commercial property insurance carriers are: 

  • Safety Discounts 

If your business has special safety features like a burglar alarm, water sprinklers, or a high-quality roof that protects your office building and equipment from possible damage, then you can qualify for commercial property discounts.  

  • Bundling Discounts 

You can get discounts if you buy multiple policies from the same insurance company. For instance, if you insure your personal car along with getting your business insurance policy then you are likely to get a bundling discount. 

  • Group Discounts 

These are the discounts that you get based on your business sector. For example, some carriers offer special discounts to those in specific industries, like farms or grocery stores. This is because they feel confident knowing their customer’s particular needs will be met with a tailored product. 

  • Loyalty Discounts 

These are offered by insurers to clients who have been with the company for a long time. Insurance companies offer this discount to their clients as a way to thank them for their loyalty. 

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How Can You Get a Discount on Your Commercial Property?

If you’re looking for ways to save, one strategy is to find an insurance agent who specializes in your industry. They will be familiar with the relevant carriers and discount opportunities, so you can get the coverage you need at a price that fits your budget. In addition, a specialist agent will be able to answer any questions you have about your policy, so you can make sure you’re getting the most out of your coverage. When it comes to commercial property insurance, working with a specialist agent is a smart way to save money. 

In Conclusion 

Keep in mind that commercial property insurance rates can also change from year to year due to various market conditions beyond your control, but an experienced commercial property insurance expert will help you find the most competitive rates and ensure you have the right amount of coverage for your business. 

When you’re ready to get started, reach out to a commercial property insurance agent to get a quote for insuring your commercial property. 


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