One of the biggest drivers of commercial building insurance premiums is the rebuild cost of your premises. Insurance companies face the largest payouts when a building is destroyed or severely damaged, in a flood or fire. 

A property that is destroyed must be demolished and a new building constructed in its place. Demolition costs include charges to safely bring down a building and remove the waste and rubble. Rebuild values also include the materials, labour and professional costs needed to reinstate the building. Professional costs include architect fees, surveying fees, local authority, etc. 
The rebuild cost is usually less than the market value of a property but it does reflect the cost of reinstating a building, discounting the value of the land. 
An accurate reinstatement value should result in an adequate amount of commercial building insurance coverage. Whereas, a quote built upon the market value, which does include the land could mean that the property is in fact, over-insured. 
To gauge an accurate valuation, a property owner should hire a qualified professional to assess the building and provide an accurate rebuild cost, to be included in insurance quotes. 

Claims History 

The claims history is also a factor that will impact commercial building insurance rates. Any history of claims cause an insurer to be cautious and either turn-down the business or increase the premium. 


The location of a property can and does affect commercial building insurance rates. The surroundings with a high rate of burglaries or vandalism will be penalised. 
Premises in flood-risk areas will not only cost more to insure, insurers might choose to exclude coverage for floods altogether. Therefore, when purchasing a commercial property, you should check the risk of flooding in the area here  


Insurers can offer discounts to businesses with excellent security. As part of the quote process, we will always ask about the types of locks, gates, cameras, alarms and other security measures that are in place. It is wise to gather as much information about security as possible, fitting dates, etc. 
Some burglars set fire to a property to destroy evidence as they leave, which will also impact the security. 


The industry of an occupant, whether a tenant or owner occupier, can affect a commercial insurance claim. For example, businesses with a higher number of visitors could be at risk of a property owner liability claim. Liability claims can occur when a member of the public is injured or their property is damaged and the building owner is to blame. 


The sector or type of industry of the occupant can also affect risk of a flood or fire. For example, a food business might pay more for commercial property insurance due to increased risk of a fire. Office premises would present a lower risk of fire, therefore would usually be cheaper to insure. 


The information you provide as part of getting quotes is all data that will affect the cost of coverage. The items discussed here will surely factor into any commercial building insurance quote. 
To ensure you are adequately covered, please get in touch with our friendly team of professional commercial insurance brokers on 01482 247 477 or email [email protected]
If you are not sure about your business insurance policies, please call HI Commercial on 01482 247 477 for peace of mind that you will be protected at all costs. At your service, at your side – commercial insurance with a personal touch. 
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