Commercial Property Insurance and Fire Damage

5/12/2022 (Permalink)

Most commercial insurance policies cover fire damage. These policies should also cover additional or secondary damage caused by water used to extinguish a fire or smoke. The following factors may impact the cost and limits of a business insurance policy.

The Type of Business

Businesses that use hazardous or flammable equipment may have higher insurance premiums. These operations may involve

• Alcohol
• Chemicals
• Cooking equipment
• Smoking
• Vehicles

The premiums for a bar, garage, or a conventional office building may vary widely based on the difference in fire risk levels. Business owners should make sure that a sufficient level of coverage is available for the potential costs of damage cleanup and restoration and liability.

Structural Components

A building made of combustible materials such as wood may pose a greater fire risk than a structure that is built out of fire-resistant materials. Owners should consider the risk of fire in the primary structure in addition to any additions or modifications. The degree to which building materials may succumb to fire and the distance of a business from the nearest fire station may drive up the cost of a commercial insurance policy.

Fire Safety Equipment

It is also crucial that a business be equipped with fire safety equipment. This may include

• Alarms and detectors
• Fire extinguishers
• Sprinklers

Some regional building codes require hardwired fire alarms. These systems should also have a battery backup in case of power failure. Battery-powered smoke detectors should also be regularly tested and the batteries should be changed. Have fire suppression systems and equipment such as extinguishers periodically inspected to ensure that critical components will function in the event of a fire.

All of these factors may impact the costs of commercial insurance coverage for a business located in Maple Grove, Corcoran, Brooklyn Park, or Champlin. A business owner may want to compare commercial policies to find the right level of coverage for fire damage.