The charge on commercial insurance would depend on the location, kind of business, safety, results obtained after inspection on the property, tenants in that property. All these parameters would determine the minimum premium charged to the property manager or the individual tenants depending on what the lease agreement states.
Also, mode of payment might entice tenants. Example: If premium is added to rental bill and paid monthly, quarterly, semi annual, annualy or bi-annual by direct withdrawals from tenant's bank account. Most insuarance companies would not take cash as form of payment. All payments need to be ducumented and backed by receipts, with a copy given to the tenant at the time payment is made.
A reasonable commercial insurance should be based on the principal, interest, taxes and ofcourse, the insurance ( premium) coverage on that property per annum. Usually, a low fee is charged and shared amoung tenants in the commercial building if for example, the property is used just for office space/s.
An insurance company might not cover a commercail property that is not protected or has no safety gadgets such as alarm system, securities both night and day. The insurance premium charged would depend on efforts made to protect this property by both the tenant and property manager.
If a commercial property has for example, a bank in the same building, you do not expect the same premium for an office space say in second floor with the Bank's premium. Also commercial buildings close to highways are less target than perperties in a remote area. Premium would definitely be different. A building with record of break-ins might not be covered by some insurance company, it is a high risk. Modifications need to be made to have desired insurance premium. Again, the insurance premium depends on what the space/s is used for within a locality.
Sep 8, 2009