Commercial property insurance is essential to the Business Owners’ Policy (BOP). Whether you operate your business on your property, leased premises, or home, this coverage secures your business’s physical assets from a wide range of covered perils. However, with the constantly increasing commercial property insurance rates, taking specific measures that reduce your insurance premiums must be your priority.
While discussing the factors that determine your premiums, this blog primarily focuses on the impact of the type of security you employ to safeguard your property and assets on your commercial property insurance rates.
Factors That Determine Your Commercial Property Insurance Rates
Commercial property insurance rates vary for different businesses as the insurance rates depend on several factors, such as:
- Property size: larger the size, the higher will be the insurance cost.
- Total value of the assets: if you have expensive machinery, equipment, and other assets inside your business property, you may have to pay a higher premium.
- Presence of hazardous substances: if your business requires storing hazardous materials, your insurer may consider you high-risk and charge higher commercial property insurance rates.
- Type of business operation: some businesses are exposed to higher risks than others and may have to pay a higher premium.
- Crime rate of the neighborhood: if your location sees frequent incidents of thefts and vandalism, you may pay more.
- Weather conditions: if your area is vulnerable to frequent floods, earthquakes, and tornadoes or storms, your premium costs will rise.
- Security system installed: installing an efficient security device or fire alarm may reduce your insurance rates.
How Can Your Company’s Security System Affect Your Insurance Premium?
Ensuring the safety of your business property from a wide range of potential risk factors by adopting appropriate and adequate security measures may help you to reduce your commercial property insurance rates. While damage to property caused by inclement weather conditions may be beyond your control, proper security systems can help protect your property from perils such as theft and vandalism, which according to insurance experts, are projected as the chief causes of insurance claims (20% of all claims) for damage to business property in the coming years.
Why On-Site Security Guards May Not Be the Best Option
Hiring security guards to ensure the security of your business premises and assets’ security may prove counterproductive. Guards may not offer adequate protection against big robberies and may be too much for everyday security. Also, your insurer may be wary if your guards are armed as it increases the risks and may lead to a hike in your commercial property insurance rates.
Automated Security: The Best Security Solution
Automated security systems are technologically advanced, efficient, and safe systems that monitor your property 24X7. Besides deterring incidents of thefts and vandalism, they provide valuable video footage as evidence if any such incident occurs. Installing an automated security system can keep your property safe and lower your commercial property insurance rates.
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