Commercial building insurance is typically a form of property insurance for businesses. Like homeowners, businesses need to pay for insurance when they own their own building, offering protection and coverage for a variety of events. Most policies protect against theft, fire, windstorm, smoke and other sources of damage, but do not offer specific coverage for things like breaking glass or falling objects. Average costs for this basic property insurance can vary greatly but businesses must forecast a certain amount when creating their operational budgets.
Most variance for commercial property insurance depends on the size of the building. An entire complex will cost much more to insure against damage than a single office or a small storefront. This makes it very difficult to judge average costs for building insurance. Businesses often submit information on their building to several insurers in order to receive realistic estimates when making their decisions. The replacement value of the building is also an important consideration and can vary based on materials used.
Generally, a professional office building may cost between $10,000 and $15,000 in premiums in 2011 to insure for property damage. However, the costs for only a small office building or an office plaza on a much smaller scale tended to be between $1,000 and $2,000. Business owners should note that insurance rates do change based on the crime rates of surrounding neighborhoods, along with any additions made to the building by the owner.
Other businesses can choose to include alternative forms of insurance for specific types of property damage. For instance, flood insurance is a common alternative type of insurance for businesses to buy in addition to their normal coverage. To give an idea of how much this can cost, a moderate or low-risk location may create annual fees of around $600 for both the building and its contents in 2011. For only the contents of the building, rates drop to $162. High-risk premiums are based on how old the building is, how many floors it has and other factors.
Commercial property rates change according to macro trends in the insurance industry. In 2011, commercial insurance stayed very stable, a pattern that had lasted years, with increases only in certain areas like California. However, rising costs in other insurance types like worker's comp caused analysts to believe that a proper insurance rate increase was also possible.