Commercial property, also called commercial real estate, is property that is used to generate a profit from capital gain or rental income. In many areas, property used as a residence is excluded from being commercial property unless the property has a minimal number of units (i.e. five or more) and/or is situated in a commercial property zone. Of course, the rules vary from area to area and insurance company classifications for commercial property vary as well. Common types of commercial property include: land such as investment properties earmarked for future development; industrial properties; office buildings and complexes; some multi-family buildings ; retail buildings; restaurants; hospitals; hotels; storage facilities; and many others not classified as residential.
8 Common commercial property insurance claims
1. Theft and Burglary:
In order to protect your property and to prevent unauthorized entry, you should have good lighting and security devices both inside and outside of the building.
2. Freezing and water damage:
All employees and personnel should know where the main water shutoff valve is. In areas where the weather gets cold, buildings need to be kept warm and snow buildup on roofs and around structures needs to be kept to a minimum.
3. Wind and hail damage:
If you live in an area that has strong winds or hail, you need to protect the property and people on it. Property left outside should be fastened and securely covered or moved inside during storms. Windows and other parts of property that can sustain damage need to be covered so that they are not broken and cause further unnecessary damage.
4. Fire damage:
Fire damage can be extensive because it can consume property very quickly. It is important to have and maintain fire preventative equipment, and to establish an emergency evacuation plan with all employees.
5. Customer injury, including slip and fall accidents, or struck by object:
It’s important as a business owner to minimize the likelihood of someone slipping and falling, or being injured on your property. No business owner wants to feel responsible for injuring another person. Fortunately accidents are preventable, and it’s important to have adequate coverage for any liability losses that may occur.
6. Product liability:
Is the liability that a manufacturer or seller assumes from a product that is sold to the consumer. For instance, if ABC Company sells a defective toaster to a consumer and the toaster has a short in it that causes the death of that consumer, then the seller and manufacturer can be sued for product liability.
7. Vehicle accidents:
Vehicles used for or owned by a business need to be adequately covered for accidents caused by them. It’s very important that everyone who use vehicles for business, be properly trained in the use and care of vehicles in order to minimize accidents.
8. Reputational harm (Reputational risk):
Is the risk of loss that results from damaging a business or entities good name or reputation. Libel, slander, and other reputational harm cost businesses more per claim than any of the other commercial property claims listed above. Some businesses Losses that may occur include: lost revenues; increased business costs; drop in shareholder value, among others.
Most commercial property owners rely on their insurance company to explain what type of coverage they need, and how much those coverages cost. If you have ever tried to read your insurance policy, you know how difficult it is to understand what the policy covers and what it does not cover. Commercial property business owners are generally confused even after the coverage is explained to them.
So, when policyholders submit claims to their insurance company for things covered in their policies, they expect their claims to be honored. But, sometimes insurance companies fail to act honorable and in good faith. When that happens, policyholders have little choice other than to seek help from an attorney. If you need assistance from an attorney, make sure to find one who has extensive experience in commercial property insurance and bad faith insurance claims. They can help when you feel like there is no other help available.