August 28, 2025

Why Insurance Providers Are Requiring Routine Electrical Maintenance for Commercial Buildings

5 Min. Read

Insurers are becoming increasingly aware of the risks that malfunctioning electrical systems pose to commercial properties. Insurers also use data to assess each property’s unique risk profile and price policies accordingly.

With repair and replacement costs on the rise, insurers are taking a more proactive approach to risk mitigation. Property owners are to complete more involved safety checks and show that they’re actively managing potential hazards before coverage is issued or renewed.

So what does that mean for you as a building manager?

Routine Electrical Maintenance Reduces Risks

Even a small electrical problem could cause millions in damage. According to the National Fire Protection Association (NFPA), large-loss fires in commercial buildings can cost as much as $200 million, which makes a strong argument in favor of keeping up with routine electrical maintenance.

For insurers, focusing on electrical maintenance makes sense in light of recent market trends. Property insurance rates have been coming down, but casualty rates are up. Casualty insurance refers to coverage for unforeseen events, including property damage and liability issues.

These rates are higher because claims are getting larger. This is partly due to high material prices driving repairs and replacement costs, and partly due to increased litigation costs and larger settlements reshaping the liability insurance market.

Insurance companies are responding to this environment by focusing on loss control. This approach takes proactive measures to experience fewer losses and limit their impact. To reduce electrical risks, your insurers can ask you to follow an electrical maintenance checklist or go through an electrical inspection. Both methods are a form of loss control.

These steps can feel like a hurdle when securing coverage, but they ultimately make your commercial building safer and help you qualify for more affordable coverage.

Electrical Risks, Liability Coverage, and Legal Implications

The liability portion of your commercial insurance policy protects you in case a building occupant sustains an injury. For instance, an electrical outlet could malfunction and shock an employee or customer.

While these cases can be complex, failing to maintain your building’s electrical infrastructure would help build a strong case for negligence and potentially cause you to lose a lawsuit filed by the injured party. Likewise, not having an electrical incident response plan in place could be a strike against you in the context of a liability case.

As a property owner, you have a duty of care toward your building’s occupants. In other words, it’s your responsibility to provide a safe environment and follow the legal principle of “reasonable care.”

While the idea of reasonable care doesn’t always have a specific definition, NFPA 70B becoming an enforceable standard in 2023 provides legal courts with clear guidelines to assess whether you did enough to manage electrical risks and maintain a safe building. From a legal perspective, falling behind on your commercial electrical maintenance obligations under NFPA 70B can be a clear sign of negligence.

For your insurer, loss prevention includes double-checking that you’re complying with NFPA 70B requirements. If a liability issue ever arises, your insurance provider could use your electrical maintenance to build a strong defense.

Keeping Repair and Replacement Costs Low

Rising repair and replacement costs are a major concern for insurers. Costs are up because of a number of factors, such as high construction material costs, labor shortages, and stricter building codes.

Insurers can face even higher costs if coverage includes an ordinance or Law coverage clause. This type of coverage kicks in if repairing or replacing your building would require significant upgrades to bring it up to code.

For instance, if an electrical malfunction damages an old panel that no longer meets NEC requirements, your insurer could be looking at thousands of dollars’ worth of electrical work, including adding AFCI protection to the new panel and replacing old wires with a higher gauge size.

To avoid these higher costs, insurers practice avoidance and can refuse to issue policies to commercial buildings that aren’t up to code. This includes revoking coverage if you fall behind and fail to upgrade your electrical infrastructure when a new version of the NEC or local building code goes into effect.

Securing Better Commercial Insurance Rates With Regular Electrical Maintenance

Insurers using loss prevention and avoidance strategies to mitigate their risks introduce new hurdles when shopping for coverage or renewing a commercial insurance policy.

Securing coverage is easier and cheaper if you have a clear electrical maintenance plan in place. Besides, some insurers can offer discounted rates if you have a good track record of maintaining your building. These savings can help offset the cost of investing in routine electrical maintenance.

Your safest option is to develop an electrical maintenance plan in accordance with NFPA 70B. In addition to helping you secure cheaper insurance rates, electrical preventive maintenance will make your building safer and make you far less likely to ever need to file a claim.

Don’t forget to document your steps to maintain your building’s electrical infrastructure. Record keeping is an important part of complying with NFPA 70B, and you can share this track record with your insurance company.

Tech-based maintenance solutions are a great way to improve your maintenance program. Sensors can monitor electrical circuit performance and alert you when something changes.

You’ll also need to identify who will conduct your routine electrical inspections and maintenance. It’s where PowerForce by Qmerit™ can help.

Simplify Your Commercial Electrical Projects with PowerForce by Qmerit™

Don’t let the complexity of managing electrical work across multiple locations or even a single site slow you down. With PowerForce by Qmerit™, you gain a trusted, single-source solution to streamline every aspect of your projects—from routine maintenance to large-scale installations.

Remove the stress of finding and vetting a new electrician for each project or managing multiple contractors across the country. Our easy-to-use platform puts the power back in your hands so you can easily navigate your projects to success.

Enjoy seamless coordination, expert oversight, and consistent quality across all your sites, ensuring your business operates efficiently and stays ahead in a rapidly evolving market.

Learn more about PowerForce by Qmerit™ and take charge today.