Simple Commercial Insurance Risk Management Strategies

Simple Commercial Insurance Risk Management Strategies
Risk is inherent in property ownership, but not all risk is necessary and some can be mitigated with the proper risk management strategies. Speaking specifically about commercial property, there are dozens of insurance factors that property owners must consider. Not all can be planned for, but some can. Here are three primary ways to handle potential risk as a commercial property owner, and specific examples of how you can apply it to your own properties.
The best way to reduce your risk is to avoid it altogether. Of course, that sounds easier said than done. However, when you anticipate risk you can plan for it. One example is to avoid risk to your physical property by planning for all the ways it could sustain damage due to environmental factors. Removing unhealthy trees, replacing old roofs, and investing in storm shutters are examples of easy ways to avoid potential environmental risk. You can also avoid risk by limiting the types of business you allow to rent your facility, for example you might prefer to accommodate an office setting rather than a manufacturing plant.

Not all insurance risk can be avoided, but all risks can be reduced with appropriate risk management strategies. A simple example of this is handrails. Installing handrails to your stairs doesn’t make it impossible for someone to fall, but it makes it far less likely to happen. Consider the areas on your property that pose specific and ongoing risks and work to mitigate them. Some examples are cracks in sidewalks that may be a tripping hazard, dark alleyways that may invite unwanted trespassers, and any egress that is not accessible to people with disabilities. In addition to physical risks, companies also use tools like cyber-security, background checks, and non-refundable renters deposits to reduce other kinds of risk.

Finally, once you’ve avoided and reduced as much risk as possible, it’s within your right as a property owner to transfer some of the remaining risks onto your tenants. Specifically, property owners can require their tenants to get renters insurance to protect the assets they bring into your building. And, companies should be required to purchase liability insurance, especially when they’re doing business that is potentially dangerous like manufacturing, landscaping, or pest control.

Risk is a natural part of life and a factor that you’re going to have to become more comfortable with as a commercial real estate owner. However, when you follow these steps to avoid, reduce, and transfer risk, your insurance risk decreases significantly. For more information about how our commercial inspection services can help you anticipate potential risks, give us a call today.