As weather-driven catastrophes become more common and severe, commercial property owners and the agents who serve them are reassessing risks and coverage to get more build for their buck.
The new Nationwide Agency Forward Commercial Lines Protection Survey surveyed commercial property stakeholders about what they’ve experienced in the last five years and how those lessons impact today’s insurance decisions.
Catastrophes Hit 1/3 of Commercial Property
Nationally, roughly one-third of commercial property owners have suffered damage from a natural disaster in the last five years; this rises to more than half in wildfire-risk states and almost two-thirds in hurricane-risk states.
Among insurance agents, severe weather risk concern has risen since 2023—especially in states most prone to wildfires and hurricanes—with 74% either “very concerned” or “extremely concerned,” up five percentage points since 2023.
Overall, the number of agents and stakeholders who were very/extremely concerned was the highest in wildfire risk states (93%, up 28 percentage points since 2023) and hurricane risk states (86%, up 16 percentage points).
Claims and Quick Recovery
Most commercial property owners who have been impacted by natural catastrophes have recovered within six months of the event, with expenses for most totaling under $10,000. Thirty-one percent said damages totaled under $3,000, and only 1% reported they had over $50,000 in damages. Almost half (46%) reported that their insurance covered all of their damage.
Top commercial property claims included broken windows (43%), structural damage (41%), damaged electrical systems (39%), roof damage (37%), business interruptions (37%) and water intrusion/flood damage (32%).
Cutting Commercial Costs
The risk of damage is up against the cost of coverage for many commercial property owners. Most property owners are looking for ways to cut insurance costs, and more than 40% are willing to reduce insurance coverage to lower their premiums.
Among respondents, 72% said they are always looking for ways to cut costs, and 42% said they would cut back on coverage to lower their premiums. However, of the 58% who said they would not skimp on coverage, 70% were in hurricane-prone states.
Instead, bundling policies and seeking better quotes from other carriers are the favored actions taken, with 69% bundling policies and 56% shopping around for better rates.
Fifty-four percent reported that they had dropped or declined optional coverages in the last year to lower costs.
