Shopping Center Insurance Claims

Strip malls and shopping centers are a staple in nearly every population center in America.  These properties are usually made up of leased units, occupied by medium to small businesses.  When a loss occurs, whether a fire, flood, hurricane, hail, tornado, pipe break, theft, or vandalism the owner of the building has to act quickly and decisively in order to avoid negative impacts on tenants businesses, or worse potentially losing tenants.  These properties are usually passive income for the owner, and dealing with a protracted and complicated insurance claim is often not something they are equipped or want to deal with.

Catastrophic weather events like hurricanes, windstorms, floods, hail storms, and fires are having a significant effect on the commercial property insurance market.  According to a 2022 article by Reuters, Global catastrophe losses are predicted to total $112 billion by 2022. Hurricane Ian and other natural catastrophes caused an estimated $115 billion of insured losses so far this year, well above the 10-year average of $81 billion, reinsurer Swiss Re (SRENH.S) estimated earlier this month.  As weather related losses rise, so too do the rate of occurrence of claims on mid-size commercial properties like strip malls and shopping centers.

Additionally, organized retail crime sprees and vandalism have contributed to an increase in the size and frequency of insurance claims at retail properties.  According to a 2021 study conducted by the Retail Industry Leaders Association and Buy Safe America Coalition, retailers lost $68.9 billion in merchandise due to theft in 2020; by 2021, that amount had increased to roughly $100 billion. The study, which was conducted utilizing exclusive data provided by some of the largest retailers in the country, provides new insights into the economic impact of retail crime:

• As much as $68.9 billion worth of products were stolen from retailers in 2019 (pre-COVID).
• Retail crime results in $125.7 billion in lost economic activity and 658,375 fewer jobs, paying almost $39.3 billion in wages and benefits to workers.
• Retail theft costs federal and state governments nearly $15 billion in personal and business tax revenues, not including the lost sales taxes.

Addressing damage and resolving claims that occur a shopping centers requires a clear understanding of the lease agreements as they relate to coverages in the policy, an accurate substantiation of covered damages and who is liable for them, as well as an ability to articulate and quantify the amount of loss sustained or potentially sustained from an interruption of business or lost rents.  An experienced public adjuster should take the lead in organizing and presenting all the fact of the loss to an insurance carrier and their representatives to ensure an equitable and expedient resolution to the claim. If you have sustained a loss at a strip mall or shopping center, give Prime Adjustments a call for a free consultation to see if we can assist.