C.O.P.E. — What Is It, and Why Does It Matter?
Risk Characteristics that Affect Business Property Insurance Costs
C.O.P.E. is an acronym used in the insurance industry for describing the risk characteristics of a particular property. Understanding these characteristics and knowing how to control them are important factors in controlling potential future losses.
- Construction – refers to the type of building materials used to construct a property. These typically fall into categories such as: frame, masonry, masonry veneer and mixed – masonry/frame.
- Occupancy – refers to type of occupancy of the building. For a commercial building, this can be office, industrial, restaurant, light manufacturing, habitational, etc.
- Protection – refers to the various protections in place to prevent or mitigate loss. Does the property have a fire suppression system? Is there a central station alarm? Distance to fire hydrants, adequacy of water pressure and water supply in the community can also be included.
- Exposure – refers to the risks posed by neighboring properties or the surrounding area. This considers property location and what’s nearby. For example, is it an office building, a subdivision, a high-hazard manufacturing facility or something else?
Every property owner and/or manager should know these very important characteristics for each of their properties. This will not only help to control potential hazards and future losses, but will allow their properties to be shown positively for the insurance community to achieve the best underwriting rate possible.
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