Financially protecting your company’s physical assets ensures you receive the coverage you need when unexpected disasters happen. This is why commercial property insurance is a must for business owners. Here’s a breakdown of what commercial property insurance is, the factors influencing cost, and more.

What is Commercial Property Insurance?

This is a policy that provides cash for damage incurred to your company’s physical property like its building, fences, inventory, computers or exterior signs. Typically, your coverage gives you the benefit when the damage occurred resulting from a fire, vandalism, pipe bursts, storms or theft. Depending on which area of the country you live in, you might consider adding optional protection to your policy for earthquakes or floods. An independent Cole Harrison agent can help you identify the right coverage protections to add for your business.

Which Factors Influence Cost?

There are many factors that go into determining the cost of the policy. For starters, your property’s location plays a huge role. If your physical assets are in an area with excellent fire services (close location to a responsive fire station), then you won’t pay as much relative to being in an area with less fire protection resources.

Building Materials and Age

Another aspect insurance providers consider is the materials used to build your organization’s buildings. If your buildings are older or contain materials more apt to combustion, then when a fire happens it’s more likely you’ll experience a total loss. Because of this, you’ll probably pay more for the insurance premium. Meanwhile, if you have a newer building with a good fire rating or you made improvements to your property, you might receive a discount. If you need assistance in ways to make your properties receive a safer fire rating, you can consult your local firefighter station for help on implementing improvements.

Neighboring Businesses

Next, you also want to consider the type of building you’re insuring. To demonstrate, if you share a property with other businesses, what kind of industries are they? By nature, office buildings will receive a better risk assessment from insurance companies than restaurants. Therefore, by knowing the types of other industries you share a space with can help you understand the costs for commercial property insurance better. This can also help you plan when you expand. By dedicating a building for your company’s use only or sharing it with similar industries can help to reduce your insurance premiums.

Emergency Resource Management

Another factor influencing cost is your access to resources in the event of an emergency. Insurance companies examine things such as the distance to the nearest fire hydrant from your building and where the closest firehouse is. They’ll also examine inside your building to see if you’re proactive in emergency measures such as having fire extinguishers on hand or have a sprinkler system installed.


Overall, commercial property insurance helps you receive the financial protection you need when the unexpected happens. And when you need assistance choosing the right policy, contact an independent Cole Harrison agent. They’ll take the time to learn more about your company’s needs and help you secure the financial protection you need.

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