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In the wake of the COVID-19 pandemic, many companies shifted to remote or hybrid work, allowing their workforce to work fully or partially from home. In the years since, this trend is still going strong, with more than 50% of workplaces implementing a hybrid model.
Because of this new working model, there have been significant changes in the usage of office buildings and commercial spaces, impacting property owners, businesses, and commercial property insurance. In this blog, we explore these effects and discuss how hybrid and remote work models changed the landscape of commercial property insurance.
What Does Commercial Property Insurance Cover?
Commercial property insurance is general liability insurance that protects businesses against losses related to their physical assets. This insurance typically covers damage to buildings, equipment, inventory, and other property owned by the business due to events like fire, theft, vandalism, and certain natural disasters.
In other words, it helps businesses recover financially by covering repair or replacement costs and ensuring operations can continue with minimal disruption.
How Remote Work Impacts Commercial Building Insurance
Now that we’ve answered the question, “What is commercial property insurance,” let’s discuss how remote work affects this insurance type.
In the past, the definition of commercial property was much clearer, with distinct office spaces and company assets. With more and more employees working from home and sometimes using personal equipment for their work, the lines between personal and professional have blurred. The rise of remote work requires a reevaluation of existing insurance policies to ensure they adequately cover the unique risks associated with this new work environment.
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Reduced Office Space Usage
Vacant and unoccupied spaces bring a unique risk profile to insurers, due to the increased risk of vandalism, theft, and potential maintenance issues. The lack of human presence can lead to higher premium costs for commercial building insurance.
When a commercial building is partially vacant or often unoccupied, problems such as a gas leak or water damage, for example, may go unnoticed for some time. For this reason, insurance brokers may need to adjust commercial building insurance premiums to account for the lack of use and risk of financial losses.
Equipment Coverage
With employees working from home, businesses need to ensure that the company-owned equipment used remotely, such as laptops or monitors, is covered under their commercial property insurance. This shift requires policies to adapt coverage for potential damage or loss of these assets outside the traditional office environment.
Commercial Property Valuations and Clauses
In 2024, investments in the commercial space in Toronto were reduced by 23%. The increase in vacancy caused property values to drop. In return, insurers have had to reassess commercial property values across the board.
Furthermore, the increased vacancy rate has left many commercial property owners vulnerable, as they may not know the impact of a vacancy clause. Generally, business property insurance brokers impose stricter conditions and specific thresholds for vacant properties. Failure to meet these requirements could result in your commercial property policy being voided, leaving you without coverage in the event of an incident.
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Commercial Property Considerations for Remote/Hybrid Business Models
Since 2020, many commercial property insurance claims have been denied because a business owner has made certain assumptions about what commercial property and professional liability insurance covers. Here are a few items to consider when choosing commercial property insurance for fully or partially remote business operations:
Incident Location
Most business property insurance only covers a business’s physical assets at the location insured on the policy. This may create a coverage gap when there are incidents involving company property at an employee's home.
It’s important to review your policy to ensure that it meets the specific needs of your business. If you want to cover equipment for employees who work from home frequently, consider a remote work insurance policy or additional coverage options to enhance your commercial property insurance.
Business Interruption and Contingent Business Interruption Coverage
Business Interruption Insurance and Contingent Business Interruption coverage are both linked to your commercial property policy. This insurance coverage helps your business recover and minimizes losses in the case of insured property loss. However, it is only triggered in specific instances of property loss. Businesses need to review their insurance policies with their brokers to ensure that their commercial property insurance coverage is sufficient.
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Entrust your Commercial Property Insurance to KASE Insurance
At KASE Insurance, we understand that navigating the ever-changing landscape of commercial property insurance can be challenging. With the rise of remote work, and the need to adapt your coverage, you need a reliable insurance partner to help protect your business. Whatever your needs are, KASE Insurance can support you with commercial general liability insurance and commercial property insurance policies tailored to you.
Don’t wait to protect your business. Contact us today! Whether you need a new quote or a review of your current policy, our team of experts is here to support you.
(416) 588 5273 
