Recommendations For Commercial Building Insurance

Recommendations for commercial building insurance in Canada

So-called ‘bricks and mortar business isn’t fading to the background anytime soon. That’s because the foundations of the world’s largest and most powerful online businesses aren’t actually cloud-based, they are concrete. The vast majority of successful businesses in Canada have solid roots in commercial real estate. But finding the best real estate for your commercial business isn’t as easy as it once was.

The Financial Post finds that “The office vacancy rate in downtown Toronto has hit a record-low amid strong demand for workspace by the burgeoning tech sector, according to a report by CBRE Group. The commercial real estate services and investment firm says the vacancy rate fell to 2.7 percent in the fourth quarter of 2018 in Canada’s largest city due to a “chronic shortage” of office space.”¹

When commercial building vacancy rates are tight, property owners and landlords have a strategic advantage. If you own or manage a commercial property, finding the best commercial building insurance is likely on your radar when renewal season comes around. If you are googling “recommendations for commercial building insurance” this article is built to give you the information you need.

Why it may be easier being green | Commercial building insurance in Canada

When determining what coverage is best for your commercial building, Canadian insurance companies take a thorough look at the property you want to insure. An assessment is a critical step in determining the type, kind and quantity of insurance that will best suit your commercial building. 

Here are a few elements that are considered when you insure a commercial building in Canada:  

1. What might potentially happen to the commercial building. This includes the worst case and the more probable risk exposures that your property faces on both a day-to-day and long-term perspective.
2. Emerging trends in the local and national property markets. Trends impact how and when commercial office spaces, commercial industrial properties and commercial retail buildings are generally, used, rented, vacant, etc. 
3. Specific exposures a commercial building faces and the risk management activities that can help to mitigate these exposures. For commercial building insurance, an insurance company will make a thorough and comprehensive assessment of your physical property.

Another factor that insurance companies may look is any environmental and sustainable elements incorporated into your commercial building. A recent Canadian Architect article cites a first-ever zero carbon building report by the Canada Green Building Council. 

The report, “confirms that Zero Carbon Buildings are financially viable today with a positive financial return over a 25-year life-cycle. It also highlights that industry is at a tipping point: the business case for Zero Carbon Buildings is going to get stronger each year due to the rising cost of carbon pollution.”²

As well, “There are also important financial benefits that were not quantified in the study, such as greater value to tenants, future-proofing against higher costs for utilities and carbon pollution, greater resiliency against future weather events, and avoiding costly future retrofits.”³

Understanding commercial building insurance | Elements and Details Count

There’s a lot to consider when your commercial building insurance requirements are evaluated. As with any form of insurance coverage, it is the details that make a difference. The Insurance Bureau of Canadaprovides some helpful information about the specific risks and exposures an insurance company sees in a typical commercial building in Canada.

The Insurance Bureau of Canada – also commonly referred to as IBC – outlines some of the elements of a commercial business property that can be insured in addition to the physical commercial building itself. This list includes:

• “Equipment
• Inventory and supplies
• Office furniture and fixtures
• Computers and electronics
• The personal property of employees while on-site
• Customer property at your business site 
• Lighting systems
• Windows
• Outdoor signs
• Fencing and landscaping
• Tools and equipment in transit or used off-site for business purposes.”⁴

Common and emerging questions about commercial building insurance in Canada

Even though you manage a complex business, you may not be familiar with every single element of commercial building insurance. When you are in the market to buy or renew commercial building insurance here are a few questions to think about.

1. Stock insurance – How much stock is stored onsite in your commercial building? What amount of coverage you would like to insure your stock for?
2. Equipment insurance – Equipment is used in your commercial building also needs coverage. What is the value of your business equipment in your commercial building? What it the value of improvements that your tenant (if applicable) has made to the commercial building you are looking to insure? What amount of coverage would you like to insure your equipment for? 
3. Coverage Period – When would you like insurance to take effect for your commercial building?

From an insurance company’s perspective, new and emerging trends in construction are also important considerations when insuring a commercial building. One such trend is to use more environmentally sustainable building materials in new builds.

Canadian Architect reports that a new building design in Toronto will include structure that, “is a composite of mass timber, concrete and steel structural assemblies. Unlike the construction of 20th century post-and-beam buildings…[the building] optimizes the use of a mass timber hybrid structural system by way of pre-fabricated components and just-in-time delivery and construction practices. By doing so, it achieves spans akin to traditional concrete and steel superstructure projects for modern commercial office buildings.”⁵

Whether your commercial building is built using traditional or emerging green materials and practices, how it is built and the materials it is built from are taken into account when your commercial building insurance quote is created. 

Get a recommended commercial building insurance quote aligned. 

Working with a team that is dedicated to business insurance is important when you are looking to get a commercial building insurance quote. ALIGNED Insurance brokers work exclusively to meet the needs of Canadian business. Contact with one of our Canadian insurance brokers to get your commercial building insurance quote aligned today.

Source(s):¹Financial Post: “There’s a chronic shortage of office space in Toronto amid rising demand from tech companies”; ^2,3Canadian Architect: “New Study Proves the Financial Case for Zero Carbon Buildings”; ⁴IBC.ca “Commercial Property Insurance”;⁵Canadian Architect: “8-Storey Hybrid Wood Commercial Building Set to Rise In Toronto”