Commercial Property Insurance & Rebuild Costs
🏗️ Commercial Property Insurance & Rebuild Costs: A Growing Concern in Canada 🇨🇦
In today’s volatile market, rebuild costs for commercial properties are soaring—and many Canadian businesses may be underinsured without even knowing it.
📈 Why Rebuild Costs Are Rising
• Inflation-driven increases in construction materials and labour.
• New regulations driving up compliance costs (e.g., energy efficiency, accessibility).
• Supply chain disruptions extending project timelines.
• Increased demand after natural disasters or catastrophic events.
💼 What’s at Risk for Business Owners?
• Co-insurance penalties for underinsuring the property.
• Delays in rebuilding due to inadequate coverage.
• Business interruption losses that exceed policy limits.
• Significant out-of-pocket expenses during reconstruction.
🔍 Common Coverage Gaps
• Policies based on market value instead of actual rebuild cost.
• Outdated valuations that no longer reflect today’s construction landscape.
• Missing endorsements, such as Bylaw Coverage or Inflation Guard.
✅ What Business Owners Can Do
• Obtain a professional rebuild cost assessment or appraisal.
• Regularly review policy limits with your insurance broker.
• Ensure coverage includes debris removal, bylaw compliance, and loss of income.
• Ask about extended indemnity periods for business interruption coverage.
🛡️ A property insurance policy is only as strong as the numbers behind it. In a shifting economic environment, aligning coverage with accurate rebuild costs isn’t just good risk management—it’s essential to protecting your business’s future.
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