• Home
  • Get A Quote
  • Customer Service
  • Refer a Friend
  • About Us
  • Location Map
  • Employee Directory
  • Privacy Policy
  • Contact Us
 
CALL US AT 352.332.0180
Home
  • Home
  • Get A Quote
  • Customer Service
  • What We Offer
    • Auto Insurance
    • Business Insurance
    • Commercial Auto Insurance
    • Contractors Insurance
    • Home Insurance
    • Renters Insurance
    • Boat | Motorcycle | RV
  • Blog
  • Resources
    • Secure File Area
    • Refer a Friend
    • Important Links
    • Insurance Glossary
  • About Us
    • About Us
    • Location Map
    • Privacy Policy
  • Contact
    • Contact Us
    • Join Our Newsletter
Auto Insurance PERSONAL AUTO
Auto Insurance COMMERCIAL AUTO
Homeowners Insurance HOME
Business Insurance BUSINESS
Toy Insurance TOYS
Contractors Insurance CONTRACTORS
Home > Blog > Commercial Property Insurance Rates Rise as Risks Grow
FRIDAY, SEPTEMBER 11, 2020

Commercial Property Insurance Rates Rise as Risks Grow

Commercial Property Insurance Rates Rise as Risks Grow

Commercial property insurance rates are on the rise across the country as insurers continue wrestling with the toll of increasing natural disasters, rising social unrest around the world (including the U.S.) and the COVID-19 pandemic.

Additionally, insurance companies have become more stringent in their underwriting by restricting some coverages and excluding risks that may have been covered in the past.

The rate increases and stricter underwriting are not a function of the COVID-19 pandemic, as rates have been on the rise over the last two years as other risks and claims payouts have grown, but the outbreak has added more pressure to rates.

According to a report in the trade publication Business Insurance, brokers are reporting average property insurance rate increases of 20% for policies that renewed on July 1, 2020. But rate increases are even higher for commercial enterprises that have certain types of occupancies, large and complex sets of risks, a history of losses or natural catastrophe exposure (hurricanes, tornadoes and wildfires, for example), the report states.

As mentioned, insurers have also taken various steps to restrict coverage, including:

  • More strike, riot and civil commotion exclusions (this coverage was common in most commercial property policies).
  • More stringent communicable disease exclusions for business interruption coverage (while most business interruption coverage on property policies excluded pandemic risks, a small portion of policies did not).
  • Reduced coverage for business interruption claims that don't include physical damage to the business.
  • Reduced limits.
  • Higher deductibles.

 

Civil disturbance coverage

The recent riots and protests that erupted across the country also caused widespread insured damage as many stores and businesses were looted, set on fire or vandalized.

Coverage of riots and civil disturbances is a standard part of most property policies, and insurance experts estimate the insured damages could surpass $10 billion as the rioting was not just limited to one city.

There had never previously been a civil disturbance event of this magnitude in the U.S. and insurers had not priced the likelihood of it happening across the nation at one time.

Globally, insurers have started introducing exclusions and raising rates after large-scale protests and civil unrest mushroomed in Hong Kong and Chile last year, causing widespread economic damage and disruption

The scale of damage in the U.S. from our own civil unrest has pushed a handful insurers to start restricting or removing coverage for strikes, riots and civil commotion. The change is not industrywide.

Policy and rate changes for this coverage are also based on geography, as the risks of civil disturbances are greater in cities than in suburbs and smaller municipalities and towns.

Businesses can also take steps to mitigate risks, such as installing video cameras for security, as well as burglar alarms and other measures to reduce their premiums.

 

COVID-19

Terms and conditions are also being tightened due to the COVID-19 outbreak, after a number of insurers were sued for not paying business interruption claims on the grounds that there must be physical damage to the property.

As a result, many insurers introduced more explicit wording to make their infectious disease exclusion "bulletproof," as one broker told Business Insurance.

 

Catastrophe exposure

In addition, insurance companies are looking at how much exposure they have to natural catastrophes, and are hence scaling back coverage or pulling out of some markets. They are looking at markets that have exposure to:

  • Hurricanes,
  • Earthquakes,
  • Wildfires,
  • Floods,
  • Storms

 

For example, in California a number of commercial and personal property insurers are restricting the number of policies they will write in areas that are at risk from wildfire. Some are also requiring that property owners create buffer areas around their buildings to reduce the chances of them catching fire during an event.

 

The takeaway

As a business property insured, you will want to do all you can to make your organization as insurable as possible in order to enjoy the best rates. That means taking measures to mitigate risks and following insurers' recommendations.

That could include installing security cameras and alarms, as well as sprinklers and other fire prevention systems. If your business is exposed to a regular natural catastrophe, you should also take steps to reduce the chances of your property being damage or destroyed.

Thank you for visiting the Partners Insurance Agency blog. We hope you found our content helpful and informative.

Posted 12:00 PM

Tags: commercial property insurance, commercial insurance rates
Share |


No Comments


Post a Comment
Required
Required (Not Displayed)
Required


All comments are moderated and stripped of HTML.

NOTICE: This blog and website are made available by the publisher for educational and informational purposes only. It is not be used as a substitute for competent insurance, legal, or tax advice from a licensed professional in your state. By using this blog site you understand that there is no broker client relationship between you and the blog and website publisher.
Blog Archive
  • 2021
  • 2020
  • 2019
  • 2018
  • 2017
  • 2016

  • insurance(99)
  • homeowners insurance(44)
  • auto insurance(40)
  • business insurance(29)
  • home insurance(11)
  • boat insurance(8)
  • workers compensation(8)
  • insurance claims(8)
  • liability insurance(7)
  • flood insurance(6)
  • liability(5)
  • additional insured(5)
  • commercial liability insurance(4)
  • d&o insurance(4)
  • umbrella insurance(4)
  • hurricane preparedness(4)
  • commercial auto insurance(4)
  • renters insurance(4)
  • insurance discounts(4)
  • teen drivers(3)
  • vacation rental insurance(3)
  • business owners policy(3)
  • tria(3)
  • small business insurance(3)
  • insurance coverage(3)
  • water damage(3)
  • summer safety(3)
  • workplace safety(3)
  • commercial insurance(3)
  • commerical insurance(3)
  • covid-19(3)
  • uber(2)
  • non-owned auto insurance(2)
  • drunk driving(2)
  • employee fraud(2)
  • terrorism risk insurance(2)
  • business owners insurance(2)
  • insurance liability(2)
  • freezing pipes(2)
  • halloween safety(2)
  • auto accident scams(2)
  • holiday safety(2)
  • natural disasters(2)
  • contractors(2)
  • moving(2)
  • dog liability insurance(2)
  • forced-placed insurance(2)
  • claims process(2)
  • buisiness insurance(2)
  • general liability(2)

View Mobile Version
Facebook
Twitter
LinkedIn
Carriers
logo, company name
text, logo
Carriers
logo
icon
logo, company name
PIA

Resources

Home About Us Get a Quote Customer Service Contact Us
a drawing of a face

Contact Us

icon
  • 4040 W Newberry Road Suite 950
  • Gainesville, FL 32607
  • Office: 352.332.0180
  • Fax: 352.378.5820
© Copyright. All rights reserved.
Powered by Insurance Website Builder