Commercial

Sample Commercial Reports

What is the Purpose of the Commercial Inspection?

Valuation for Premium Calculation

Commercial inspections serve several purposes. These include ensuring the building is correctly valued for replacement purposes. Therefore, part of the inspection is often providing square footage, # of stories, sometimes a diagram, age and condition of utilities, etc.

What Do They Do?

Next, the inspection will provide detail of the operations and occupancies on site.  The description includes photos that highlight maintenance, safety, and operations

Defects

Finally, the inspector will look for any problems that might cause a loss, including trip hazards and poor maintenance, or other loss exposures. The inspector will look for water damage, evaluate access and egress for liability reasons, and examine electrical and mechanical systems.  Recommendations will be made to mitigate these issues.

Using Your App In The Field

The app is a great time saver and makes sure that your quality is consistent from one inspection to the next.  You should know that there are multiple ways to capture the info in the field:

Use the App:  This is the best way and should be used the bulk of the time

Take Photos with your Phone: You can bypass the app in the field by double tapping on the case.  Then start taking photos with your camera.  When back at your computer you will upload the photos with the Photo Uploader function.  Here are some situations when to take photos outside the app:

• It's raining and your device could get damaged

• It's cold and your fingers are numb

• It is a really large risk and you would rather upload and label the pics later

Field Forms: It is never bad to have paper field forms with you on site.  Print them out and put them in a notebook for reference in case anything happens to your phone or you choose to refer to them.  They come in handy if you have bypassed the app and do not have a list of questions to ask.

Modules

The app is loaded with many pre-built modules that will expedite unique questions and photos which are required for particular types of risks.  While there is not a module for every type of risk, here is a list of some of them:

• Solid Fuel Burner

• Additional Commercial Building – add a form for each building over 100 sq ft and name them

• Commercial Cooking- Whenever there is a stove that can cook a pot of grease

• Apartment Module- if requested by Customer

• Day Care

• Pool/Spa

Please refer to the ViewSpection section to view how to add and complete modules on the app.

Protection

Here is a list of fire protection items to inspect when doing an insurance inspection on a building, including private protection and public protection measures:

Private Protection:

1. Fire extinguishers: Ensure that fire extinguishers are properly placed throughout the building, that they are properly charged and inspected, and that they are appropriate for the types of fires that may occur.

2. Smoke detectors: Ensure that smoke detectors are installed in all required areas, are properly placed, and are functioning properly.

3. Sprinkler system: Check the automatic sprinkler system, including the condition of the sprinkler heads, control valves, and water supply. Ensure that it is properly designed and installed according to local codes and standards.

4. Fire alarm system: Check the fire alarm system, including the control panel, smoke detectors, heat detectors, and notification devices, to ensure they are functioning properly.

Public Protection:

1. Fire hydrants: Check the condition and accessibility of fire hydrants in the vicinity of the building, ensuring they are properly painted and maintained.

2. Fire department: Identify the type of fire department (paid, volunteer, or combination) and their response time, level of training, and equipment.

3. Distance to the fire department: Check the distance from the building to the nearest fire station, and ensure it meets local requirements.

4. Fire escape routes: Ensure that the building has proper fire escape routes that are marked and easily accessible to all occupants.

5. Emergency lighting: Check that emergency lighting is available and operational in case of a power outage.

6. Emergency exits: Ensure that emergency exits are properly marked, easily accessible, and unobstructed.

Additionally, when inspecting a building for fire protection, it is important to ensure that there are no hazardous materials or potential ignition sources that could increase the risk of fire.

Interview

Interviewing is an art. You must balance a certain level of intrusiveness into the insured's business workings with a fair regard for their privacy. Another balancing point is the ability to "branch" your questions out as you proceed through your interview. It is critical that you respond with appropriate NEW questions when the insured responds that they will be purchasing the building next door or that they recently expanded their services to include spray painting.

The interview can happen in many ways. Do not restrict yourself to one approach. You will need to be flexible to accommodate the insured. We find that pre-interviewing the insured is very effective. In you appointment call, do your basic interview questions with the insured and develop a working relationship BEFORE you arrive on site. Use this pre-interview to confirm exactly what the operations are, where the location is and how many buildings there are involved. I

f you also review Web research prior to your pre-interview, you will be able to complete your site work in a much more efficient manner.

Of course, on site interviews are standard. Sometimes the interview will happen when you arrive and sometimes it is best to conduct it at the end of your site work. Again be flexible. Do not hesitate to contact the insured once you begin writing up your report. There are often, additional nuggets of information that you will have forgotten to ask. It is best to mention to the insured that you may be contacting them again to wrap things up.

Have your questions ready and organized. Do not waste the insured's time by being unorganized yourself. Be respectful of the insured's time. Even on a large risk, the interview time should not be excessive. We find that most interviews can be completed in less than 15 minutes.

OPERATIONS

Although the survey organizes your report in section order, you are the one mainly responsible for putting together the organization of the Operations or Summary of Risk narrative. Next to the recommendations, this is the most important part of your survey. Here you need to provide for the underwriter a concise yet specific description of what goes on at the risk location(s).

It is suggested that you start with general information and then get more specific.  Typically you should answer these questions in your operations summary- What does the Insured do?  How do they do it?  How many employees do they have? What are the hours of operation?  How long have they been in business? If there are tenants in the building we need to include who the tenants are and what they do, ie ( There are 4 units in the building -2 restaurants and a dental office and 2 vacant units that are for lease.  Insured hopes to rent in the next month ) 

Example:

The insured leases space providing equipment for the automotive industry.  They fabricate engine covers using components manufactured by outside suppliers as well as producing the plastic cowling on site using 4 hi pressure, computerized injection machines -1200 units are produced per month etc…

The following are some typical ways to organize topics within your report:

By Floor – When covering occupancy of a building, start from the basement and move up. Describe each area briefly as to its location and use. When describing a one-story risk such as a strip mall, move from one end to the other.

By Operations – When reporting on operations, start with the raw materials and proceed through to the end product. Describe the processes involved and the areas where they take place.

By Paragraph – Often you will encounter a report that will require a lot of narrative. This often leads to long paragraphs containing many different subject matters. This is difficult to read and understand for anyone reviewing the report. The solution is simply to use sub-paragraphs within the main paragraph. The sub-paragraphs do not need headings. Just type in a blank line between the paragraphs. This serves as a visual break within the main paragraph and denotes minor changes in topic.

Examples of Operation Summaries:

Sample #1: This is a long standing business in the area that caters to local and seasonal lake clientele. Business is 80% food and 20% alcohol, with food sales growing. Kitchen has been expanded since last survey and 3 electric fryers are in place. They are under residential style hood and have no protection device in place. Premise has no housekeeping defects and there is no sign of grease buildup.

Insured’s are active in daily operation and live next door. Parking is side street and a lot across street. There is outside dining under patio. Bar seats 15, dining area sits 50 and patio sits 24. 6 employees plus owners.

Hours are closed Monday, 11a-2am T-Sat and close at 1am on Sunday.

Sample #2: This is a nursery operation which began in 1889. Insured’s father bought it in 1969 and John took over in1986 when his dad became ill. John assumed ownership in 1992. Currently, John and his fiancé operate this seasonal business. They sell 75% fruit trees, 24% shade and 1% ornamental. The bulk is bare root stock and some balled and burlap. Some walk in trade from landscapers but mainly a wholesaler to garden centers. Sales have been cyclic due to money available for staff and growth cycles. Sales last year were $100-150k but can go as high as $900k. Insured expects sales to be well ahead of last year. Employees are hired only in Spring and Fall and can number up to 15. They farm 285 acres.

Sample #3: The insured has developed this business from scratch over 23 years and today has a large, one location, business operation. Currently, 60% of business is trailer sales such as horse, utility, cargo and snowmobile trailers. 15% is western wear clothing, 15% is trailer parts and accessories and 10% is service to the trailers such as custom work prior to the sale and additional work after the sale. Sales were 3 million in 2008 and will be slightly higher this year. Inventory is 1 million and 50% is trailers and balance is store and parts/materials.

The facility was built from scratch and has been added on to consistently. All construction is pole frame, metal clad on slab floor. Roofs are gable and metal covered. All utilities are quality grade with no defects noted. No housekeeping defects were noted.

Shop does trailer work and custom fabrication to pre built trailers, tire work, brake work and trailer set up. 12,500# floor hoist is in place.

Store is organized and clean. Parts area is separate from store area as is warehouse for parts. Warehouse is all racked and organized.

Second location was the former sales location near the family homes and is currently only used for storage and is mainly vacant.

Structure Summary:  This should include what the building is used for, occupancy if applicable,  number of stories, construction of building, materials used in siding, roof and foundation.  You should mention all buildings on the property.

Protection Summary:  This would include both public and private protection.  Enter the distance to hydrant and fire dept. You should mention if there are any hazards, ie Fire extinguishers are not tagged or mounted.  or the commercial kitchen AES system is not current with inspection or not UL300.

Defects