Guest Post by Sara Stanley, MCR, Managing Director, Commercial Tenant Services, Inc.

Reviewing your Base Year expenses may be the answer to cost savings. . . but where to start? 

Enter a recent scene-stealer: Insurance. Often considered a mundane line-item expense, insurance costs can be a covert culprit, stealthily accumulating hidden overcharges over time.

Here’s a breakdown of factors influencing the commercial insurance market. Some are reasonable, while others may not trace back to your Base Year, meaning you might not be on the hook for hefty increases: 

• Increased occupancy affecting the value of the property and increasing premiums
• New coverage and policies added due to changes in ownership and ownership structure 
• New coverages required by lenders 
• Reinsurance costs 
• Soaring climate and weather-related losses 
• Rising litigation expenses 
• Instances of fraud 
• Escalating building and construction costs, including labor and materials 
• Projects plagued by inefficiency 
• Abnormal spikes in claims leading to extremely high loss ratios 
• Years of insurance being priced below its true value 
• The impact of inflation 
• Instances of insurers going under or exiting the market, resulting in fewer options 
• Heightened scrutiny from standard carriers in their underwriting process 

Talk to your Lease Audit Team today!

Sara Stanley, MCR, is Managing Director at Commercial Tenant Services, Inc.