Want to keep your office building insurance premiums under control?
Every commercial property owner has the same dilemma. Insurance rates continue to rise and one water loss can ruin your claims history for years. The good news?
A proactive restoration plan can change all of that.
With the right plan in place you can:
- Cut down claim severity
- Protect your tenants and indoor air quality
- Lower your long-term insurance exposure
Here’s exactly how to do it…
Here’s what’s covered:
- Why Insurance Exposure Is Climbing For Office Buildings
- What A Proactive Restoration Plan Actually Looks Like
- The 4 Biggest Risks That Drive Up Premiums
- How To Build Your Restoration Plan The Right Way
Why Insurance Exposure Is Climbing For Office Buildings
Commercial water damage is a much bigger problem than most owners think.
Did you know it’s also the #1 cause of rising insurance premiums for office buildings year after year. Water damage claims account for over 50% of all insurance claims for commercial real estate.
That’s huge. And it gets worse…
Leaks that occur in businesses account for more than $10 billion in property losses annually, according to the American Insurance Association. The culprits: toilets, broken pipes, HVAC units overflowing, and roof leaks.
Here’s the kicker:
Water damage is connected to a larger issue: Indoor Air Quality. Stagnant water doesn’t just ruin drywall it fosters mold growth. Mold spores are then spread throughout the HVAC system. According to the EPA indoors pollutants can be up to 100x greater than outdoors. This poses health risks for tenants and liability for owners.
The quickest way to mitigate this exposure is by having a trusted restoration company in Tampa, FL on retainer before disaster strikes. A proactive partner allows you to remove moisture rapidly, keep indoor air quality pure, and stop minor issues before they turn into catastrophic claims.
What A Proactive Restoration Plan Actually Looks Like
An emergency restoration plan is a documented set of pre-approved instructions for managing water, mold, fire or storm damage.
Most owners aren’t proactive. They wait for water to burst through a pipe and start dialing numbers. Once the crew arrives the damage has already spread. A proactive plan would look a little bit different. Here are some things to include:
- A pre-vetted restoration partner you can call 24/7
- Clear response timelines for each type of incident
- Documented mitigation steps to keep insurers happy
- Routine inspections of high-risk areas
Pretty simple, right?
The key thing is to move quickly and keep good records. Insurers will look favourably on owners who can demonstrate that they took reasonable steps to mitigate further damage. They won’t if you can’t. That can save you thousands on your renewal premium.
The 4 Biggest Risks That Drive Up Premiums
In order to build your plan, you first need to understand what keeps insurers up at night. Four risks sway commercial premiums more than any others.
1. Slow Water Mitigation
Water moves quickly. The longer it stands, the more damage occurs. Insurance companies will evaluate how quickly the water was extracted from your structure. The slower you respond, the larger the claim payout will be and the higher your renewal premium will be. Removal of water within 24-48 hours is considered best practice.
2. Poor Indoor Air Quality
This one flies under the radar but it’s massive.
The EPA estimates that one third to one half of all buildings have moisture problems which promote mold and bacterial growth. In an office building this can lead to tenant health complaints, asthma attacks and lawsuits.
Indoor air quality problems can cause long-tail liability. Claims that continue to occur years after the original occurrence. Eliminate this and your exposure plummets.
3. Repeat Claims
The one thing an underwriter fears is a claims history. If you have had two, maybe three water claims in five years, you are going to:
- A big jump in premium
- Higher deductibles
- Possible non-renewal
Stopping repeat claims is where proactive restoration shines.
4. Lack Of Documentation
Adjuster rolls desk, paperwork please. Photos, invoices, dry logs, moisture readings. If you don’t have it, you’re stuck. Document, document, document. Owners that keep great docs get paid quicker, bigger, and help keep premiums down.
How To Build Your Restoration Plan The Right Way
Ok, now on to the nitty gritty. This is where the plan actually saves you money. If you follow these steps you will leave other office building owners in the dust.
Pick A Pre-Vetted Restoration Partner
Step 1 and it’s more important than anything else. You want a restoration company already on file before disaster happens. Signed paperwork in place, shared building access information, agreed upon response times. Why? Water damage repair cost about $13,954 per claim on average. Commercial claims are exponentially higher. A partner on standby reduces your response time from days to hours.
Map Out Your High-Risk Areas
Every office building has weak points. Common trouble spots include:
- Roof and parapet walls
- HVAC drain pans
- Restrooms and break rooms
- Sprinkler heads
- Basement and ground-floor units
Do building walks with your restoration partner and record every one. Then set up routine inspections.
Set Up Clear Response Protocols
When something fails, your team needs to know how to respond. Give them a one-page checklist that includes:
- Who calls the restoration company
- Who notifies the insurer
- Who shuts off the water
- Who documents the damage with photos
Post one on every utility closet and at the front desk. Speedy employees equal tiny claims.
Track Indoor Air Quality
Poor indoor air quality is the death knell for your commercial insurance ratings. Make indoor air quality testing part of your quarterly maintenance routine. Test again following any water incident prior to tenant re-entry. It protects your tenants and it creates a paper trail that insurers crave.
Document Every Single Incident
Little things count, too. Got a leak that was small enough for you to fix? Photograph it. Note the date. Keep the receipt. Create a file for each property and maintain it. If renewal time rolls around you’ll be able to show your insurer a spotless history.
Bringing It All Together
Office building insurance doesn’t need to be prohibitively expensive. When you implement a proactive restoration plan, you mitigate the risks that cause high insurance premiums. Learn how you’ll save:
- Money on premiums and deductibles
- Time dealing with adjusters
- Headaches from tenant complaints
To quickly recap:
- Find a restoration partner before you need one
- Map out your high-risk areas
- Set up simple response protocols
- Track indoor air quality
- Document everything
Do this and you’ll be miles ahead of other office building owners.
