When it comes to Commercial Property Insurance, insurance companies have put exclusions in place when it comes to vacant properties. Right now we might not see a lot of vacant buildings in Austin, TX, because the economy is doing well, but when the market starts to change, it's not uncommon to see vacant buildings. How an insurance company responds to a loss or claim at a vacant structure could make or break a company, so hopefully this information will help some business owners.
The question I get at times is, what does it matter if it's vacant or not? Simply put, your property is more susceptible to losses the longer it's vacant. Studies have shown that vandalism and theft claims increase when the property is vacant. This is the primary reason insurance companies put this clause on the policy.
Insurance companies understand that businesses go out of business or move and will be vacant at times. However, there is a limit on how long they will provide coverage. In most, cases there is a 30 day or 60 day vacancy clause, which means, if the property has been vacant for more than 30 or 60 days, some causes of loss, like, vandalism and theft, might not be covered. That is why it's extremely important to read your policy to understand what kind of vacancy clause is on your policy.
If you have a property that is going to be vacant for an extended period of time due to renovations, being sold, etc., there are insurance policies that will cover the property. If you need help obtaining one of these policies or would like for me to review your policy with you, please feel free to contact me.
No really, all I want is a ballpark quote...... I get this question a lot when it comes to Business Insurance. Unfortunately, it's not that easy to give a "Ballpark Quote" for General Liability Insurance, or any type of Business Insurance for that matter. There are so many variables that go into the quote. Usually when I tell people this they want to know what type of variables, so hopefully this article will help answer some questions.
One of the major factors that can impact your General Liability Insurance is Gross Sales. Some business owners don't even want to give out this information, because they are private companies. However, this is one of the ways insurance companies measure the risk. Simply put, an insurance company sees a business with $1,000,000 in Gross Sales more susceptible to risk than a business in the same industry with $100,000 in Gross Sales. It's a numbers game so to speak. The more sales, the greater chance of risk. I'm not saying I agree with this approach, it's just one of the factors companies use to measure risk.
The second major factor is the type of business. Each business is going to be classed using a classification code. Obviously, some classes carry more risk than others. Take for example, a manufacturer of fitness equipment, some insurance companies won't even write it. Classification can play a huge factor at times.
Another factor that impacts a General Liability Insurance quote is claim history. This one is pretty obvious I know, but it's still worth mentioning. If you've had an insurance claim within the past 5 years, it can have an impact on your rate, especially if the payout was substantial. Prior to quoting or binding, the underwriters will most likely want to know loss control measures that have been put in place to ensure a similar loss/claim does not occur again.
Lastly, years in business can play a factor. Just like the old saying goes, "the older you get, the wiser you get". Experience can be a factor. A company that starts a new business with no management experience in that field will pay more than a business with 20 years of experience (all other factors being equal of course).
When you put all these factors together, you can see why a "Ballpark Quote" isn't that easy. These are just some of the variables that go into a General Liability Insurance Quote. Be sure to talk to your agent about any questions you have. If you don't have an agent, feel free to contact me. I am always happy to help.