There continues to be a high demand for commercial insurance coverage but eligibility criteria have tightened in the current hard insurance market. Providing underwriters with full risk details is particularly important given this situation because the more risk information a broker includes, the better the chance of obtaining a quote.

We recently featured a webinar, with Commercial Building Construction, facilitated by Jo Anne Michell, CIP, Owner of Effective Training & Communications Plus, that explained the benefits to commercial brokers of using the C.O.P.E. method—a well-known insurance acronym that stands for the Construction, Occupancy, Protection and Exposure of the property to be insured. This approach gives brokers a solid understanding of the risk, the ability to prepare complete risk submissions to underwriters and reduces turn-around time for quotes.

Breaking down the acronym, Construction takes into account the type of building materials used and their fire-resistant rating, for example fire-resistive construction versus frame construction.

Occupancy takes into account what businesses are operating within the building. Take, for example, a wood or paper products warehouse constructed of non-combustible, unprotected steel. Fire would spread rapidly in such a building. There would be complete structural collapse within ten minutes. If the same warehouse was occupied by a metal pipe supply firm, the risk of severe fire damage would be greatly reduced. Brokers must always confirm the occupancy of a commercial building. If a building has more than one tenant, the occupancy of all tenants must be confirmed.

Next, brokers need to determine a risk’s Protection against both fire and burglary, including sprinkler and security systems. The final piece of the puzzle is the Exposure from other businesses or buildings located beside or behind the building to be insured.

Gathering the C.O.P.E. details allow brokers to go beyond simple renewals. Collecting this information ahead of time gives brokers the chance to sell the insurance company underwriter on the merits of a new piece of business before the policy can be sold to a client. It also allows brokers an opportunity to discuss actual cash value as opposed to the reconstruction cost of a building.

“This is especially important considering that many commercial buildings in Ontario are significantly under-insured,” said Jo Anne.

Be sure to check out our other upcoming webinars for more invaluable continuing education content.