Commercial Landlord Insurance | Compare Quotes Online (2024)

FAQs

Why is commercial property insurance so expensive? ›

The continued impact of catastrophic events is a major factor driving up costs, along with the increasing cost of capital, financial market volatility and inflation. This is an expense carriers need to pass along to customers.

The primary reasons for the difference in cost revolve around who is occupying the home. Insurance providers often see lower average claim amounts and fewer claims for owner-occupied homes when compared to tenant-occupied rental properties.

The standard commercial property insurance deductible is $250. However, other deductible amounts are available and the deductible applies only once per loss.

Commercial property insurance protects your company's physical assets from fire, explosions, burst pipes, storms, theft and vandalism. Earthquakes and floods typically aren't covered by commercial property insurance, unless those perils are added to the policy.

1. State Farm. State Farm is the industry's biggest player, both in the US and overseas. The Bloomington, Illinois-based P&C insurance giant wrote almost $78 billion worth of premiums in the past year.

In 2024, we expect commercial property growth rates in the high single digits, and liability rate growth in the low single digits, on average. Commercial lines average rates increased by 8.1% year-on-year in 3Q23, slower than the 8.9% gain in 2Q23, according to the CIAB.

When it comes to landlord insurance, a good rule of thumb is to buy enough insurance to: 1) fully replace your rental property if it's damaged and deemed a total loss and 2) fully cover the cost of all of your assets.

The core coverages of landlord insurance include property damage, liability protection, and rental income lost due to a tenant's inability to rent. Additional riders—or add-ons to policies—can be purchased to cover income lost when a tenant misses a rent payment and flood damage.

Landlord insurance is similar to homeowners insurance policy, but specifically designed for a rental property. Most landlord insurance policies provide liability, property, and loss of income coverage. The cost of a landlord insurance policy is generally 15%-20% more than a homeowners insurance policy.

Commercial insurance is divided into two main categories: property insurance and casualty insurance.

How to calculate commercial property insurance premium? ›

Typically, insurance premiums for commercial properties are set by multiplying the value of the building and its contents by a value that correlates to level of risk. Most of the time, properties with high risk have higher property insurance rates, while lower risk properties cost less to insure.

Commercial Property Insurance

Property insurance covers the building structure itself, as well as business property such as equipment, inventory, furniture, and more. Covered perils in a property insurance policy usually include losses from fire, storms, theft, burglary, or vandalism.

Commercial property insurance generally does not cover the following, which may be covered with separate insurance policies or additional coverage endorsem*nts: Business vehicles. Employee theft. Employee injury or illness.

Commercial package policies can't include certain items like workers' compensation or directors-and-officers insurance. Workers' compensation insurance is required by law and must be purchased as a separate policy. Directors-and-officers policies are necessary for non-profit organizations.

In Commercial Property Insurance, certain types of property are usually excluded from coverage. Among these are crops, wharves or docks, and outdoor trees, shrubs, and plants which can be easily damaged or destroyed.

The value of your property is a critical factor in shaping your insurance policy limits and pricing. High-value properties naturally command higher premiums because they represent higher risk and a more considerable potential loss for the insurance company if something goes wrong.

Commercial policies are designed to provide coverage for the increased risks that arise from a business' daily operations. This type of insurance is typically more expensive than personal auto because of the higher liability coverage it provides.

According to Marsh, global commercial insurance rates increased by 2% in the fourth quarter of 2023. In Q3, the change was a 3% increase.

The maintenance, utilities, property management, and insurance expenses for commercial properties can be more significant due to their larger size, specialized infrastructure, and business-specific requirements. These additional costs are factored into the property's value and rental rates, resulting in higher prices.