The Value of Commercial Property Inspections..

The Value of Commercial Property Inspections..
A commercial inspection may be considered for a number of purposes, but always the underlying reasons are:

  • Verifying a safe environment
  • Verifying compliance with applicable laws and regulations
Depending on the building and business type, a commercial inspection may be required by a variety of authorities. Hospitals, for example, may receive a number of inspections, including those from the State Health Department as well as from OSHA (Occupational Safety and Health Administration). They are also subject to periodic fire department inspections. These are required inspections done to verify safety and compliance.

Another Important Commercial Inspection
Another important type of commercial inspection is the one done on behalf of the insurance company underwriting a policy for a particular commercial property. While this inspection is also concerned with safety and compliance to laws and regulations, unlike with OSHA, which can levy monetary penalties for noncompliance, insurance inspections are done primarily for the benefit of the insurer.

As an insurance underwriter, you want to know what types of insurance risk a property exhibits in order to determine whether or not your company wants to underwrite the risk and how much to charge for any policy issued. You also want a clear idea of the valuation of the property under consideration should it become damaged or destroyed by a peril covered by your policy and need to be repaired or rebuilt.

Other Inspections Can Help Paint an Accurate Picture
Since most businesses receive periodic OSHA inspections, the results of these inspections can go a long way toward describing the condition and risk profile of a property. These records may be utilized by your property inspectors if permitted to provide additional data for a comprehensive inspection report.

A company’s risk management, loss prevention and safety programs can be monitored to determine what risks are present and what type of mitigating action is being or can be taken to lower these risks. Sometimes company management isn’t aware of some of the risks present in their workplace until something untoward occurs. A thorough commercial inspection can uncover hidden risks that, once identified, can be lessened or neutralized.

Commercial Building Inspections
Commercial buildings can be any income-producing property from cafes, convenience stores and condominiums to strip malls, storage facilities and sports complexes. The type of inspection required for each individual property will depend on that property’s:

  • Occupancy use
  • Size
  • Types of processes going on within
  • Existence of any hazardous materials or high-risk equipment

While a standard residential property inspection concentrates primarily on the condition of the physical structure and various systems within the structure (plumbing, electric, HVAC, etc.) under consideration, a commercial inspection must include this and more. With employees coming and going and customers coming in and out, liability protection is a big part of commercial insurance. Because of this, it’s important to uncover any apparent liability risks present in the business.

Commercial Risk Management
While each industry may be slightly different, here are some common potential losses faced by businesses in the event of a destructive occurrence:

  • Physical property, to include buildings, equipment and stock
  • Valued information critical to business operations
  • Repair/replacement costs for damaged equipment/property
  • Impact of a loss on a company’s ability to continue to conduct business
  • Lost revenue due to business interruption

Specific risk management activities can help prevent losses such as those listed above. Part of a thorough commercial inspection should include review of a company’s risk management program that you, as the insurer, can incorporate into your guidelines for lowering insurance risk and insurance premiums. Contact Insurance Risk Services for more information about our field services.

We’re delighted to announce that Insurance Risk Services will rebrand to Davies in the near future.

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