Commercial Fire Insurance 101

While it is true that you can and should take steps to make your commercial property as safe as possible, there is no way to truly control or prevent natural disasters like fires. When you consider the fact that fire can cause absolute devastation to your business, learning about commercial fire insurance and getting this additional protection just makes good business sense. Read on to learn more about commercial fire insurance and why it is must-get protection for any business:

Why Commercial Fire Insurance is Important

In the event of a fire that damages your business, you will receive a cash payment to cover your loss. Again, such a loss can be devastating and mean the end of your business and your way of life, so it needs and deserves the added protection of a Commercial Fire Policy. While you might think there is a small chance you will actually face a commercial fire that threatens your business, there are more than 100,000 businesses each year that deal with commercial fires. Although that number has been reduced over the past few decades— probably due to added safety measures— the cost of fire-related property damage has gone up exponentially. Therefore, the risk of a commercial fire, though less than years prior, is more costly if it does occur. 

What Does Fire Insurance Cover?

Commercial Fire Insurance as part of your commercial property insurance covers your building, the contents of your building and the property of others damaged in the fire. These covered costs under a commercial fire policy could include the following:

  • Damage from falling objects.
  • Water damage from a sprinkler system.
  • Gas carbon dioxide damage.
  • Dry powder damage.
  • Loss of office equipment.
  • Loss of kitchen equipment, such as costly appliances. 
  • Broken windows.
  • Smoke damage.

How Much Does a Commercial Fire Policy Cost?

Generally, you would purchase a commercial fire policy through your property insurance. Factors like your business’s proximity to a fire department and the flammability of the building materials within the building itself can lead to higher premiums. 

Statistics About Commercial Fires

While homeowners fire insurance gets a lot of attention, there isn’t nearly enough attention paid to the necessity and benefits of commercial fire insurance. The following are some statistics to give you an idea of how damaging commercial fires can be and how they might get started in the first place:

  • Some 61% of restaurant fires, 50% of motel fires, and 30.4% of office fires are caused in some way by cooking and begin in the kitchen area. While a great deal of these fires remains confined to the kitchen area, they can still cause a large amount of damage when you consider the cost of replacing all the appliances, not to say anything of the cost that occurs when it isn’t contained and damages the rest of your business as well. 

  • Around 18% of all warehouse fires are the result of electrical malfunctions. This type of electrical malfunction is often caused by either circuits being overloaded or daisy-chaining extension cords.

  • Sadly, some 1,200 injuries and 95 deaths are caused each year by commercial or business fires. Fatalities occur in all sorts of working environments as well, meaning businesses other than industrial and manufacturing— even regular offices— can face a situation where employees are in danger from fire. 

  • Around 31% of all commercial fires happen between the hours of 7 pm and 7 am. However, these fires are responsible for 67% of the property damage. This means that leaving a building with fewer or no people can be a double-edged sword. There is less risk of a fire starting because no one is present, but if it does, it is more likely to spread and cause greater damage. 

Bottom Line: Don’t Neglect Commercial Fire Coverage

Commercial fire policies are available through property insurance or through a business owner’s policy. Contact our team today to learn more about this coverage and why it’s necessary for today's businesses.


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