Inside Commercial Real Estate Property Insurance for Large Buildings


New York City features some of the largest names in the financial industry, technological fashion world and the real estate property empire. Insuring large commercial real estate properties and apartments in New York City as well as those located across the country takes the expertise and experience you’ll find with Seneca Insurance Company. Also, it is increasingly more important in today’s hard market, especially when securing the best real estate property.

Insurance brokers over the last couple of years, as a result of the hard market, have been having tough conversations with their clients about their property insurance. Likewise, brokers and their clients are seeing rising rates, lower limits, diminished capacity, restrictive carrier appetite, and greater underwriting scrutiny. Several factors have contributed to the hard market. These include weather and disaster events, which have become more severe, frequent, and harder to predict. In 2021, losses from natural disasters in the United States were pegged at roughly $145 billion, of which $85 billion was insured, according to the National Oceanic and Atmospheric Administration (NOAA).

Inflationary Pressures Influencing Property Values

In addition to losses stemming from disasters, inflationary pressures have caused the price of labor and materials to skyrocket. This, this impacts the cost of rebuilding after property damage. Supply-chain disruptions haven’t helped either. Subsequently, it takes longer to construct, repair, or rebuild commercial real estate properties, resulting in additional costs. 

Another concern is the underreporting of property values. Inflation, currently at 9.1% (as of June), which is the highest it has been in 40 years, can result in a gap in the amount of Property insurance a client carries. Additionally, it affects what it would cost to rebuild in the event of a loss. Replacing buildings and their contents becomes much more expensive.

Insurance to value (ITV) numbers should reflect the full value of commercial property and its building personal property. It is a key part of analyzing exposure so that capacity can be allocated, terms and conditions can be set, and the risk can be priced correctly. Clients need accurate valuation data to ensure their property portfolio is adequately insured.

Older buildings will also be impacted, as the cost to meet current building codes may exceed the building’s Replacement Cost coverage.

Look to Seneca for Coverage

Seneca offers brokers a Property insurance solution as part of our commercial package for large commercial real estate properties, including difficult-to-place risks. Additionally, we provide up to $80 million in limits per building with no cap on total policy values.  

We offer Agreed Amount, Guaranteed Replacement Cost, and Actual Loss Sustained options on our Property form. We also include several key coverages in our Property policy, such as Ordinance or Law, Sewer, and Drain Backup, Computer Fraud, Fine Arts, Pollutant Cleanup and Removal, and Equipment Breakdown, among others. In addition, our Property policy extends coverage for the newly acquired or constructed property. 

You can also offer Flood insurance to clients through us. Remind your insureds that even buildings in low-risk flood zones should consider purchasing Flood insurance. According to FEMA, areas with low to moderate flood risk account for approximately 25% of all Flood insurance claims. 

Our commercial package includes General Liability insurance with coverage enhancements as well. 

Seneca’s underwriters are available to discuss your commercial real estate accounts. We recommend getting ahead of your insureds’ renewals to evaluate each risk properly. Our focus is on understanding a risk’s exposure so that we can help you find a home with us.

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