I own businesses. One of my businesses downsized its office space. We didn’t move. We just reduced the space we occupy within the same building.
When my company’s office space decreases its square footage from 5,000 to 1,000 within the same space (same building/floor), shouldn’t my property insurance premium also decrease? Why?
If you’re the tenant, then the rating basis isn’t the square footage occupied – it’s the PROPERTY LIMIT. If the limit of coverage stays the same, then the fact that you’re occupying less coverage, is completely irrelevant. Also, like the E&O you just asked about, there’s still a "minimum premium" that applies to the policy.
Square footage is one of four commonly used rating basis for GENERAL LIABILITY. Typically, you’d see it most often in warehouse risks. Not having any idea what kind of business you have, odds are, square footage isn’t a rating basis for the GL either.
You can easily check your quotes in internet, for example here – homeinsurance.awardspace.us