The Effect of Security Measures on Commercial Property Insurance Rates

Security measures play a significant role in determining commercial property insurance rates. Insurance companies use a variety of factors to assess the level of risk associated with a property, and security is one of the most important considerations.

The presence of security measures such as alarms, surveillance cameras, and fire suppression systems can lower the risk of theft, vandalism, and fire damage. As a result, insurance companies may offer lower rates to properties that have these types of security measures in place.

Properties located in high-crime areas or with a history of security breaches may be considered higher risk and subject to higher insurance rates. Additionally, properties that are not well-maintained or have structural issues may also be considered higher risk and may result in higher insurance rates.

Overall, security plays a significant role in determining commercial property insurance rates, and property owners can take steps to lower their rates by implementing and maintaining appropriate security measures.

3 Factors that Determine the Commercial Property Insurance Rates

Commercial property insurance is essential for any businessperson who aspires to grow their business. This policy protects your finances in case of damage to your commercial property. Your property is at risk of damage, considering the frequency of natural disasters in the U.S., which is why property insurance is crucial. The bad news is that spending too much on commercial property insurance may end up collapsing your business rather than protecting it. Keeping this in mind, always strive to keep your commercial property insurance rate low without compromising the quality of coverage.

Here are three factors that determine the cost of commercial property insurance, and tips to lower the cost.

  1. Business Location

    Geography matters a great deal when it comes to insurance costs. This is because insurance risks vary by business location. For instance, having your premises in a flood-prone area increases the chances of loss through flood damage. It is not surprising that homeowners in flood-prone areas pay more for home insurance coverage. The same applies to business owners with premises located in such high-risk areas. Small businesses in flood-prone areas pay a minimum of $5000 every year for flood insurance, a figure way higher than the average.

  2. Vulnerability to Burglary

    While some areas have a high crime rate, your initiative to enhance security in your commercial property can go a long way in lowering your insurance rates. One great way to enhance security in your premises is by installing a modern security system. Specifically, consider installing security cameras, motion detectors, and burglar alarms on your commercial property instead of hiring guards who may only do a little.

  3. Property Value

    A high property value is a risk to the insurance provider. In case of a loss, the insurance company will have a significant burden to bear, which is why the insurance cost will be high. Lower property value translates to lower insurance rates. Since it’s not practical to intentionally lower your property value for lower insurance rates, take advantage of the following tips to keep your commercial property insurance rate affordable.

Tips to Lower Your Commercial Property Insurance Rate

The surefire way to lower commercial property insurance rates is to lower the risk in your business. You can achieve this in the following ways:

  • Relocating your premises to a safer location
  • Installing a security system in your business premises
  • Comparing rates from different providers
  • Asking for discounts from your insurance provider

While business relocation may seem costly, you will save more on commercial insurance by taking this step. Also, you will have peace of mind knowing that you won’t wake up to a vandalized and burglarized property.

Get Professional Assistance at Leland Smith!

Commercial property insurance rates are going up by the day due to inflation. You can significantly lower your rates using the tips mentioned above. Contact us at Leland Smith, and we will get back to you in no time to resolve your questions. We are licensed to offer insurance services in Ohio, Indiana, Michigan, Pennsylvania, Arizona, Wisconsin, Kentucky, and Tennessee.

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