Wisconsin's property values increased by a record-breaking 13.1% in 2023. That included an impressive 10.9% growth in commercial property.
The more valuable these investments become, the more important it becomes to protect them. It makes commercial property insurance a key consideration for business property owners. It's essential for staying profitable, safe, and legal.
Read our commercial property insurance guide for properties in Neenah, Wisconsin.
What Is Commercial Property Insurance and What Does It Cover?
Commercial property management serves to protect commercial properties. It can cover the actual building and any structures attached to it.
This coverage may extend to:
- Walls, roofs, and foundations
- Electrical or plumbing systems
- HVAC systems
- Outdoor signage
- Furniture and equipment
- Fences and landscaping
- Important documents
- Inventory
- Others' property
Insurance for business properties protects against natural disasters such as fire, wind, or hail. They can even protect against vandalism, explosions, or riots.
You may need a specialized policy to protect against floods or earthquakes. They also won't pay for wear and tear and pest or insect damage.
Factors Affecting Premiums
Have you heard that the three l's of real estate are location, location location. They also help determine insurance premiums. You'll pay less for properties in areas that have excellent fire and theft protection and that aren't prone to natural disasters.
There's also the construction and condition of the building itself. You'll have higher premiums if it's old, made with shoddy materials, or not up to local building codes.
High-risk tenants such as restaurants, manufacturing, or industrial businesses may require specialized coverage.
Safety or security features can help lower your premiums. Try installing security cameras or sprinkler systems.
Higher deductibles mean paying more during a claim but premiums. Lower coverage limits reduce your premiums but may not be sufficient for protecting business assets.
Determining Your Commercial Property Insurance Needs
The first step in getting the right coverage for your commercial property is determining how much it's worth. This requires a detailed property valuation.
Get a thorough risk assessment as well. It'll identify any gaps in your protection.
There are several ways to calculate how much it would take to replace your important assets.
Replacement cost looks at their current value. Actual cash value factors depreciation into the mix. Functional replacement cost focuses on replacing old items in old buildings.
Penalties for Underinsuring
Many lenders require you to have it as part of their mortgage or loan agreements. Not having enough coverage could cause you to default or pay fines.
You can also face coinsurance penalties for not getting enough. Careful calculation is the best way to avoid them, so get a professional to help.
Where to Get Help Managing a Commercial Property
Commercial property insurance protects everything in and around your commercial property investment. Getting the right amount requires careful evaluation but is an essential step.
PMI Fox Valley is a full-service property management company. We serve residential and commercial owners and association managers.
Our team can handle tenant screening, leases, rent collection, maintenance, financial reporting, and more. Our quality service and top-notch technology let you keep track of your property at all times. Contact us to see how we can maximize your profitability and preserve your investment today.
