A boat warehouse with holes in its roof. A business in a strip mall that’s labeled as retail but actually was a restaurant. An office worker who thought loading shotgun shells in the workplace was a good idea. These are all potentially hazardous situations that an insurer would want to be aware of before underwriting a commercial property policy.
Providing insurers with a timely warning that a property has the potential for unexpected and higher-than-usual claims can prevent premium leakage and reduce loss costs.
While these may be glaring examples of situations that pose a higher-than-usual potential for loss, they're all real-world conditions that a Verisk Survey Services professional encountered in the field reviewing commercial properties on behalf of insurers. Every year, thousands of these hazards are spotted in commercial properties across the United States in all geographies, from metropolitan areas to rural communities.
A vital “heads up” for hazards
On any given working day, highly trained Verisk field representatives survey commercial properties to check whether the information on an insurance application or renewal matches what they see on site. Most of the time, the survey goes smoothly. But sometimes field representatives encounter conditions so notably hazardous that they immediately call the underwriter and then follow up with a detailed email, including photographs that document the hazardous conditions.
This High-Risk Notification Service is an integral component of Verisk’s Survey Services. Insurers need timely alerts to unexpected hazards when deciding on coverage, pricing, and whether or not to renew a policy. This is important because insurers must comply with regulations, which can vary by state, that can limit their ability to change policy terms, cancel mid-term, or drop a policy at the time of renewal once it’s written.
Each member of Verisk’s 400-strong Survey Services team has an average of 12 years of experience in the field. Their work starts by making an appointment for a survey with a property owner. It’s not unusual for a field rep to find some problems, including unlit exit signs, expired fire extinguishers, or cracked parking lots. But once these add up, it’s an indication that a property owner is not adequately maintaining the building and several such observations could trigger a High-Risk Notification.
A trained eye spots hazards
The representative who encountered the boat warehouse with the faulty roof recalls seeing the sky clearly through large missing roof sections, which had fallen into the facility. The potential hazards included harm to people entering the warehouse from falling roof materials and damage to the property stored inside. The building was also at risk from water entering and ruining floors and walls.
Encountering a different business in a strip mall than the one listed in a policy or application is not unusual because those locations may have high turnover. The property owner who manages the strip mall might not alert their insurance agent about the change, but insuring a restaurant involves more risk than a retail store. In one survey, a field rep encountered a restaurant kitchen without any exhaust hood or filtration system of any kind. In another, a deep fryer was placed so close to a wall with plastic paneling that the paneling was melting and curling up from the heat.
In the case of the office worker reloading his shotgun shells, the employee told the field representative that his wife didn’t want him to perform the task at home, and he thought it would be OK to do it at work. The underwriter who wrote the business policy believed the hazards were limited to normal office conditions and had no idea there was gunpowder on site until the field representative called to provide a High-Risk Notification.
All Verisk commercial property surveys come with the High-Risk Notification Service–at no extra charge. Providing insurers with a timely warning that a property has the potential for unexpected and higher-than-usual claims can prevent premium leakage and reduce loss costs.