Colorado is home to over 650,000 businesses and 3 million employees. As national trends like rising property costs, inflation, and severe weather events impact the commercial real estate industry, we spoke with Paul Boehm of Sentry Insurance to discuss how these trends impact risk, and therefore, insurance.
Sentry recently opened its mountain region headquarters in Denver where Boehm serves as Sentry’s regional executive. His focus is on building relationships with businesses and insurance agents throughout the area. He leads Sentry’s underwriting, sales, and distribution teams with more than 30 years of experience working with nationally recognized insurance companies. He has lived in Denver for almost 20 years, giving him first-hand experience with the unique landscape of risk and insurance needs in the mountain region.
What type of weather can negatively impact commercial developments in Denver and what can businesses do to protect their properties?
The Denver area receives some of the most frequent hailstorms in the U.S. In commercial real estate, these storms can cause expensive damage to vehicles, equipment, and buildings. If it’s right for the circumstances, we recommend using hail guards to protect building exteriors and rooftop equipment. We encourage you to inspect and maintain your roof on a regular basis. The threat of wildfire is also real. We saw that in 2021 when the Marshall Fire destroyed more than 1,000 homes and dozens of local businesses. Recent economic conditions could put you at even greater risk of financial loss if you experience damage. We recommend ensuring your insurance coverage meets your current property valuation
What issues can accidents cause developers?
Slips, trips, falls, and auto accidents may cause significant injuries to employees, customers, and even bystanders. As a result, your business may face increased medical costs, workers’ compensation claims, and insurance rates. Litigation is a possibility, too. We encourage business leaders to develop a formal safety plan to help reduce the risk of injury. You can also conduct a safety audit to identify opportunities to create a safer workplace.
What coverages should developers and contractors in Denver and the region consider including in their policy?
Each business is different. It’s important to work with an insurance agent who knows your business and can help you choose the right coverages. We see a lot of catalytic converters, copper pipes, tools, and wire stolen from unsecured locations. Secure your property to reduce the risk of theft and discuss policies that help protect against theft or damage caused by crime. To reduce premiums, some businesses choose higher deductible plans while placing a focus on stronger risk mitigation strategies to reduce the instances of crime. Nothing is foolproof, but you can reduce the risk of theft when you take preventative steps.
Businesses today are also under constant threat of cyberattacks. Education and awareness help because employees are often your first line of defense. Talk with a local cybersecurity expert to evaluate and strengthen your current protocols and consider purchasing cybersecurity coverage.
Inflation and supply chain issues challenge developers and contractors. What impact has it had on their business?
Supply chain issues make it difficult to bid on jobs and can delay current projects. That’s why it’s important to curb theft as much as possible. The costs of materials and supplies have risen or fluctuated, making it harder to stay on budget. We encourage businesses to have a backup plan. Identify what you need, and what could be more difficult to source. Some general contractors have taken over certain things, like ordering lumber. If production stops, some businesses in the area can benefit from business income coverage to account for longer recovery timelines.
How have changing Denver property costs affected commercial properties?
For property owners, you never want to find yourself in a situation where your property value has increased suddenly and your business is underinsured. If a loss should occur, that means your policy won’t cover your costs and it can be harder and more time-consuming to get your business back up and running. We recommend speaking with your insurer to determine how often you should assess your property values and insurance policies.
In what ways might risk and insurance trends be different in Denver than in other large cities in the region?
There can be weather issues throughout the Front Range, but the Denver area has some of the most challenging weather. Heavy snow, hail, and wildfire are some of the biggest concerns commercial real estate owners face. This is why it’s so important to understand your risks and work to reduce them.
What’s the best news you can give a commercial property owner in Denver as it relates to their insurance?
The best news is that managing risk is all about understanding what could happen. Today, many business owners think much more proactively about their insurance — assessing the unique pressures and risks they face to help protect their business. Many businesses redirect resources to safety to help lower their insurance premiums. Being proactive puts them in a much stronger economic position.