According to a recent survey, 75% of businesses in the United States are underinsured. This may be due to having the wrong type of coverage, the wrong amount of coverage, or maybe even no coverage at all. This is a large number that you do not want to be part of, especially if disaster strikes.
So how can you, as a business owner, ensure that you’re not caught in this miscalculation? By securing the correct commercial property business insurance.
One factor that holds business owners back from insuring their business property is concern about costs. But the cost of commercial property insurance is a fraction of what you would spend if you experience a natural disaster or business interruption and the peace of mind that comes with carrying commercial insurance is invaluable.
To better understand how much is commercial property insurance, here’s a look at national averages and the factors that affect insurance premiums.
How Much is Commercial Property Insurance on Average?
There are a range of factors that affect commercial property insurance rates. Chief among them are what types of insurance your business needs and how much coverage you wish to secure. But, the national average for commercial insurance is about $800 annually or $66 monthly. Small business owners may pay lower rates under $50, and larger companies may pay closer to $100 per month, but commercial insurance is typically always affordable, considering the risks.
If you are able to bundle your commercial property insurance with general liability insurance for a Business Owner Policy (BOP), your costs may even be lower as many insurance companies will offer discounts for carrying multiple policies.
What Factors Impact Commercial Property Insurance Costs?
Commercial property insurance isn’t one-size-fits-all as many individual factors affect your costs. These may include geography, area of business, the types of coverage you select, and more. Each business owner can decide for themselves whether to increase coverage or cut costs on insurance. Here’s a brief breakdown of things that can impact your monthly premiums.
The location of your business plays a role in how much is commercial property insurance would cost you. Businesses in higher-risk locations for natural disasters such as flood zones or tornado alleys will pay higher premiums than locations without fear of natural disasters. Similarly, those in rural areas may be cheaper to insure than urban businesses near areas of high crime, but close proximity to a fire station and sprinkler systems installation can also decrease costs. State laws and ordinances also vary from state to state and you may have to carry certain coverage to comply with state law, which can affect your costs.
The type of business you conduct also affects your risk level, and thus your costs. Some businesses are inherently more risky to insure. For instance, work-from-home IT specialists carry less risk while conducting business than real estate agents who spend a lot of time traveling and entering properties. Similarly, a business with physical injury risk, such as a fitness gym, carries more risk than a business consultant who sits at a desk most of the day answering phone calls and emails.
The size of your property and company can increase or decrease your monthly commercial insurance costs. If you have a large business property with a large staff, you have more square footage and employees to insure. But if your property is smaller with fewer employees and foot traffic there is less of a risk of injury or issue that your insurance company needs to be concerned about.
Types of Coverage
In some ways, simple math controls your insurance costs. More insurance obviously equals more cost. Therefore, the types of insurance your business needs will increase or decrease your commercial property insurance costs. Some businesses only carry minimum liability insurance and basic commercial property insurance, which is better than not having a policy. However, some businesses require more coverage like cyber attack coverage, auto coverage for vehicles, or equipment breakdown coverage to service elevators and HVAC systems. Each of these coverages increases the cost of your commercial property insurance. But also decreases the amount of money you will have to pay out of pocket if incidents occur.
As a business owner, you are in control of how much risk you wish to carry on your own shoulders. Therefore deciding to increase or decrease your policy deductible can make a significant impact on your monthly insurance payments. If your company can afford to pay a high deductible in case an emergency arises, then selecting a high deductible may save you on monthly costs. But if you cannot afford to pay a high deductible, then it is smarter to select a low deductible because if you can’t pay your deductible, your policy will not pay out.
How to Find Commercial Property Insurance
Many insurance companies offer commercial property insurance. So how do you know which company or plan is best? It takes time and research. But you do not have to do that work yourself. When you work with Gebhardt Insurance Group, our brokers take the time to understand your needs and budget and can match you with the perfect plan and insurance company to meet those needs.
Don’t run the risk of being caught in a disaster without insurance, call our team at Gebhardt today. You won’t regret it.