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Loss Costs: A Quick Reference Guide

July 14, 2021

A key purpose of WSRB Loss Costs is to give you helpful information about commercial properties you’re considering insuring. To help you get the most possible value from WSRB Loss Costs, and to save you time, we’ve put together a reference guide. You’ll find explanations of essential Loss Cost terminology and links to in-depth articles for more information.

How are WSRB Loss Costs developed?

First, an inspection

For specifically rated buildings, the first step to developing a WSRB Loss Cost is a commercial property inspection. One of our skilled analysts visits the property and looks at not only the building itself but also multiple aspects of occupant operations.

All inspections include:

  • Measuring the building's dimensions and drawing a diagram of it.
  • Measuring the building’s square footage.
  • Determining its construction class and earthquake class.
  • Checking fire extinguishers and fire suppression systems, such as those installed in restaurants.
  • Inspecting the automatic fire sprinkler system, if one is installed, and reviewing installation, maintenance, test and other important documentation.
  • Taking photos of the exterior of the building and adjacent buildings so you can see potential exposures.
  • As of May 2021, our analysts take additional exterior photos and, when possible, interior photos.

Some parts of the inspection process are the same for every type of building, and some parts vary. A restaurant, a warehouse and an auto repair shop all present different sources of potential fire risk, and our commercial property analysts tailor the inspection to focus on the risks relevant to each building.

There’s never an additional charge for an inspection; all the inspections you need are included in your WSRB Subscription. And, if you would like us to look at or photograph a specific part of the property or operations during our inspection, simply note that in the comments section of the Request Inspection form.

Get a behind-the-scenes look at a property inspection in our blog post. We’ve also created a guide to the inspection process for building owners that we encourage you to share with your customers. The guide includes a checklist to help the owner get full credit for any sprinkler systems installed.

Some buildings can be class rated and don’t require an inspection. Rule 85 determines whether a property must be inspected and specifically rated. This rule, which comes from the Commercial Lines Manual, is more than ten pages long. We’ve created a summary so you can learn the basics of Rule 85.

A restaurant interior with peopleA restaurant presents a different set of potential fire risks than a warehouse or auto repair shop, so our commercial property analysts tailor inspections to each type of business.

Related: 
Inside a WSRB Property Inspection

Next, a calculation

The findings from an inspection are translated, using our General Basic Schedule (GBS), into a WSRB Loss Cost.

The GBS translates the analyst’s findings into Loss Costs for the building, general contents and contents for each occupancy type description. The GBS uses engineering principles, building code principles and fire protection principles to make that translation by adding a charge for each deviation from a building and occupancy that presents minimal fire risk.

You can learn more in our recent blog post on what WSRB Loss Costs are and how they help you.

How do I read a WSRB Loss Cost publication?

Let’s walk through the key elements of a WSRB Loss Cost. Here’s a screenshot from a recently inspected property.

Loss Cost sample

At the top, you’ll see the building’s mailing address, description and status. If the status is Inactive, please request a new inspection by clicking on “ReInspect,” which takes you directly to the inspection request form. A status of Inactive means that although we did inspect the property in the past, the information we have is now out of date. Requesting a new inspection will ensure you get accurate, up-to-date information.

In the next row, you’ll see the risk number, which we assign. You can save this in your records and use it to quickly search for this property again in the future.

Then comes information on whether the property is specifically rated or class rated.

Sprinkler credit

Moving one column to the right, you’ll see information about the property’s sprinkler credit. “Fully Sprinklered” means the property has an automatic fire sprinkler system that’s sufficient to protect it from significant damage in the event of a fire and has been properly tested and maintained.

You might also see “Partially Sprinklered” or “Non Sprinklered” here. In some cases, “Partially Sprinklered” means there’s an automatic fire sprinkler system protecting the entire building, but that system isn’t receiving full credit for insurance purposes. In many cases, “Partially Sprinklered” means there’s a system protecting only part of the building, so that system receives only partial credit for insurance purposes.

“Non Sprinklered” means either there’s no automatic fire sprinkler system in the building, or there is a system, but that system doesn’t qualify for any credit.

Read our blog post to learn more about why a sprinkler system might not get full credit.

Codes and classifications: CSP, RCP and more

The next two columns provide a lot of information in a small amount of space. The CSP Code, always four digits, tells you about the business being conducted by the building’s occupants. Here, the code is 0433, meaning there are multiple non-manufacturing occupants.

Read our blog post to get an in-depth explanation of CSP codes.

The RCP code, also always four digits, tells you: Rating, Construction Class and Protection Class information. This building’s RCP is 4203. The 4 indicates it’s specifically rated with sprinkler system credit, the 2 means it’s joisted masonry construction and the 03 means the building has Protection Class (PC) 3. Because PCs can vary from 1 to 10, the last two digits are reserved for them.

Read our blog post for a comprehensive look at RCP codes. We also have a series of posts on Construction Classes, which starts with class one: frame. In our blog post, you can learn more about PCs for individual properties.

Next comes information about the property’s fire protection area, which you can use to get more details on the fire protection capabilities available locally. 

One column over, you’ll find the building’s EQ Class, or earthquake classification, which is based on construction features affecting its ability to withstand an earthquake. The number tells the type of frame, and the letters tell you about other features of the building. For example, this building is 5AA, meaning it has wood or metal floors and roofs and exterior, load-bearing walls made of concrete or brick masonry.

See our blog post for a full explanation of earthquake classifications for buildings and a guide to each classification code.

To the right of the earthquake classification is a variety of information:

  • Territory tells you about the building’s location and is typically used more for statistical analysis than for underwriting.
  • Schedule tells you the rating group and is also usually used for statistical analysis rather than underwriting.
  • Group 2 Code tells you about the building’s ability to withstand wind and some other uncommon hazards. Read our blog post for more information on Group 2 Codes.
  • Stop Code tells you if there’s a change that’s likely to affect this property in the near future, such as a new rate level, new PC for the community or other important change.

A warehouse with storage on racksTo get full sprinkler credit, a warehouse with storage like this will need an automatic
fire sprinkler system that meets specific requirements. 

Related:
WSRB's Essential Guide to Commercial Property Risk Assessment

 

Commercial Property Report

Next comes the detailed Commercial Property Report (CPR) created by the commercial property analyst who visited the building. Access the report by clicking on “Report Available.”

In the report, you’ll find:

  • Year built.
  • Number of stories.
  • Total square footage, as measured by our analyst.
  • A description of the construction materials used in the roof, floor and walls as well as the interior finish.
  • Information about:
    • The building’s foundation.
    • Each occupant.
    • Exposures.
    • Fire extinguishers.
  • A thorough report on the automatic fire sprinkler system, if one is installed.
  • A photo of the building.
  • A diagram of the building and its immediate surroundings.

You can use this information to not only better understand the risk you’re evaluating but also as the basis for Individual Risk Premium Modifications (IRPMs). In Washington state, there are six categories an IRPM could fit into, and our CPRs provide information on four:

  • Location: accessibility, congestion and exposures.
  • Building features: age, condition and unusual structural features.
  • Premises and equipment: care, condition and type of premises.
  • Protection: if not otherwise recognized.

Explore how you can use the data in our commercial property reports to offer your customers IRPMs.

WSRB Loss Cost data

At the bottom, you’ll find current and future WSRB Loss Cost editions and their effective dates. Simply click on the “+” sign to access the one you need. You’ll see WSRB Loss Costs for the building, general contents and for each occupancy type description. You’ll also find the CSP and RCP codes for each occupancy type.

Read our previous blog post for more details on how to read a WSRB Loss Cost publication.

Learn more about how we develop WSRB Loss Costs and get additional useful policy rating and underwriting information in our guide to commercial property risk assessment. If you need additional information, please contact our customer service team. We’re here to help and happy to answer questions.


 

Robert Lacy, WSRB's Vice President, Inspection Services & Professional Development, oversees our team of commercial property analysts as they produce advisory Loss Costs, commercial property reports and evaluate automatic fire sprinkler systems. He is involved in the annual evaluation of our Loss Cost levels and ensuring we are current on coding and rating issues for commercial property. He also works to encourage continual professional development for all WSRB employees.

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