Professional services
Commercial Property Insurance Calculator
Works commercial property cost, where insuring to value is what decides a partial claim.
Result
An estimating tool, not insurance advice and not a quote. Actual premiums are set by underwriting on factors no calculator sees: claims history, credit and loss data, exact location, construction, contract requirements and the insurer's own appetite. What cover you need is a question for a licensed broker who has looked at your situation. Coinsurance is the clause that catches people. If a policy requires you to insure to 80% of replacement cost and you insure to less, claims are reduced proportionally even when they are far below the policy limit. Replacement cost and market value are different figures, and in a soft property market replacement cost can be the higher of the two.
Get a Free Business AuditHow the calculation works
Building and contents values at the rate for the construction, occupancy and protection, with the deductible chosen, giving annual and monthly cost. The values matter as much as the rate, because most policies include a coinsurance condition that penalises underinsurance even on a partial loss.
What moves the number
- Building and contents values, at replacement cost.
- Construction type, occupancy and protection.
- Deductible chosen.
- Business interruption cover and its indemnity period.
Where this one goes wrong
Coinsurance is the condition that catches people: insuring a building for less than the required percentage of its value reduces a partial claim proportionately, so a property insured at half its value can see a partial loss paid at around half even though the claim is well inside the limit. Review values as construction costs change rather than carrying last decade's figure. Business interruption is the other line worth attention, since the lost income after a serious property loss frequently exceeds the physical damage.
Before you quote
- Insure to replacement value and review it as costs change.
- Understand the coinsurance condition in your policy.
- Check the business interruption indemnity period is realistic.
Questions
About this calculator
What is coinsurance and why does it matter?
A policy condition requiring insurance to a set percentage of value. Fall short and a partial claim is reduced proportionately, so a building insured at half its value can see a partial loss paid at roughly half even though the claim is well inside the limit.
How often should values be reviewed?
Whenever construction costs move materially, which in recent years has been often. A value set years ago and carried forward leaves the business underinsured without anything visibly changing, and the shortfall only appears at claim time.
Is business interruption worth buying?
The lost income after a serious property loss frequently exceeds the physical damage, so it is usually the more important half. The detail worth checking is the indemnity period, since rebuilding and recovering trade routinely takes longer than the period chosen.
The formula
premium = exposure / rate basis x rate x risk multiplier, less deductible credit, plus claims loading
Put this calculator on your site
Free to embed. Paste this where you want it to appear. It stays up to date automatically because it loads from BDEVY.
Please keep the attribution line. It is the only thing we ask in return.
How to use this calculator
- Building and contents value ($). Enter your own figure; the page starts at $850,000.
- Rate per $1,000 of value. Enter your own figure; the page starts at 4.8.
- Risk classification. Enter your own figure; the page starts at Typical (1.0x).
- Deductible ($). Enter your own figure; the page starts at $2,500.
- Claims history loading (%). Prior claims increase the premium, sometimes sharply.
- Minimum premium ($). Enter your own figure; the page starts at $900.
The result updates as you type, so you can try a figure, see what it does to estimated annual premium, and change it back. Nothing you enter is sent anywhere or saved.
A worked example
These are the figures the calculator opens with. Every number in the results column below is produced by the same calculation the page runs, so you can follow it through before putting your own figures in.
What goes in
| Input | Value |
|---|---|
| Building and contents value | $850,000 |
| Rate per $1,000 of value | 4.8 |
| Risk classification | Typical (1.0x) |
| Deductible | $2,500 |
| Claims history loading | 0% |
| Minimum premium | $900 |
| Insured as a share of replacement cost | 100% |
| Coinsurance requirement | 80% |
What comes out
| Result | Value |
|---|---|
| Estimated annual premium main result | $3,590 |
| Per month | $299.20 |
| Before loadings | $4,080 |
| Credit for the deductible | $489.60 |
| Effective rate on exposure | 0.42% |
Roughly $3,590 a year, about $299.20 a month, which is 0.42% of the exposure. Underwriting will move this considerably.
How sensitive the answer is
Holding everything else steady and changing only building and contents value, this is what happens to estimated annual premium. It is worth knowing which of your inputs the answer actually hinges on, and which barely move it.
| Building and contents value ($) | Estimated annual premium |
|---|---|
| $425,000 | $1,795 |
| $637,500 | $2,693 |
| $850,000 example above | $3,590 |
| $1,275,000 | $5,386 |
| $1,700,000 | $7,181 |
Every other input is held at the example value while this one changes, which is not how a real job behaves. Treat it as a guide to which number matters most, not as five separate quotes.
What each figure means
- Building and contents value ($)
- A money amount, starting at $850,000.
- Rate per $1,000 of value
- A number, between 0 and 500, starting at 4.8.
- Risk classification
- Choose from Low risk (0.75x), Typical (1.0x), Higher risk (1.6x), High hazard (2.5x).
- Deductible ($)
- A money amount, starting at $2,500.
- Claims history loading (%)
- Prior claims increase the premium, sometimes sharply.
- Minimum premium ($)
- A money amount, starting at $900.
- Insured as a share of replacement cost (%)
- A percentage, between 0 and 120, starting at 100%.
- Coinsurance requirement (%)
- A percentage, between 0 and 100, starting at 80%.
What the results tell you
| Result | What it is |
|---|---|
| Estimated annual premium | The headline result. A money figure. |
| Per month | A money figure. |
| Before loadings | A money figure. |
| Credit for the deductible | A money figure. |
| Effective rate on exposure | A percentage. |
Keep going
Related calculators
Estimating is the easy part
The jobs you never hear about cost more than the ones you mis-measure. BDEVY builds the marketing, systems and automation that bring them in.