Important Considerations When Insuring Commercial Properties

Commercial property insurance agents and underwriters are constantly under pressure to both increase their profitability and bring in new business clients. In the overwhelmingly competitive commercial insurance market, this pressure can result in sloppy work, costly errors and even lawsuits that can cause damage to an agent’s business and reputation. One way for commercial property insurance agents to become more successful in meeting their business goals is to develop a consistent format for insuring new clients. Below are some of the most important considerations to keep in mind when insuring new commercial property clients.

Maintenance and Repair Practices

The standards that a commercial property owner adheres to in terms of maintenance, repair, and upkeep are a good indicator of the kind of resources they have available and of their commitment to the property itself. An ill-maintained building can be a sign that this property may have a large number of risks that can make it more difficult to insure.

Adjacent Properties

Information on exposures is an important aspect of risk management, and that includes looking outside of the property lines. Agents can get a lot of insight on the exposures of a potential client’s property by examining the data on adjacent buildings. For example, a building located in close-proximity to an electrical substation or large propane storage may present serious potential risks.


A primary consideration when underwriting any commercial property insurance policy is determining the proper construction class. Doing so is crucial for rating a building’s fire risk – a necessary part of any property’s risk assessment. Agents should ask certain questions to help with this determination: What materials make up this building? What percentage of the structure does each material make up? How much damage can this building sustain when exposed to a fire hazard? The answers to these questions will help identify the proper construction class and ensure fire risk is adequately assessed.


In commercial property, occupancy refers to the type business being conducted in the building rather than who is living in it. Occupancy for a commercial building can include office, industrial, restaurant, light manufacturing and so on. A building’s occupancy type helps underwriters estimate the susceptibility of the building to losses from exposures such as fire, smoke and water damage.

Replacement Costs

Sometimes replacement costs for commercial property are downplayed by building owners in an attempt to obtain lower premiums. In the event a loss occurs, the policy won’t adequately cover the damage. According to industry experts, approximately 75 percent of commercial buildings are underinsured. It’s important for insurance agents to get the most accurate numbers possible to ensure that all replacement costs can be met by the policy limits.

Risk Improvement Efforts

Obtaining a risk improvement statement can provide an insurer with valuable information on a property. A risk improvement statement typically includes specific information on hazardous conditions, identification of fire protection measures and suggestions on improvements for both. This information help the underwriter determine the most accurate coverage price as well as provide a valuable insight to the owner for suggested risk improvements, which will positively impact their coverage in the long term.

About AmSuisse

Formed in 2013, AmSuisse, Inc. has quickly distinguished itself as a wholesale operation that specializes in working very closely with our agents and broker partners to develop responsive, individualized service for each client. Our unparalleled writing support, industry-specific expertise, marketing support, responsive proposals and quotes, strong customer service, and strong relationships with our carrier partners have all helped us to provide the best possible coverage for our clients. To learn more about our available coverage, contact us today at (800) 485-0229 to speak with one of our representatives.