Fires, natural disasters, vandals, and thieves – what are the most common threats to commercial properties in Latvia?

Data from the insurance company “BTA Baltic Insurance Company” (hereinafter – BTA) for the past three years shows that commercial properties most often suffer losses as a result of unlawful acts by third parties, natural disasters, and vandalism. For example, compensation of 290,000 euros was paid for a building damaged by a storm, which suffered a damaged roof, facade, broken windows, and water-damaged floors. As explained by Ivo Danče, Director of the Claims Department at BTA Insurance, when a disaster strikes a commercial property, it causes significant losses not only to the property itself but also to the business as a whole, as equipment critical to business operations is often damaged, production or service provision is interrupted, and obligations to customers and business partners are jeopardized. 

Since 2023, the majority of insurance claims have been filed for property damaged due to unlawful acts by third parties—theft, intentional property damage, and losses caused by vandalism. Meanwhile, the largest insurance payouts have been made for commercial properties damaged by fires and storms. 

Fire causes the greatest losses by destroying infrastructure and halting business operations 

Fire is one of the most devastating disasters that can affect commercial property, as it damages not only the building’s structure but also resources critical to the company’s core operations. Flames and high temperatures can irreversibly damage production equipment, documents, and IT infrastructure, while firefighting efforts cause additional damage even to areas not directly affected by the fire. Over the past three years, BTA has paid out more than 3.7 million euros in claims for the 11 largest fires in commercial property insurance, with the largest of these—2 million euros—paid out for a fire-damaged production facility. 

“A fire often means not only direct material losses but also a prolonged interruption of business operations, a drop in revenue, an inability to fulfil contractual obligations, and consequently reputational risks, the consequences of which can be felt long after the incident itself. It is precisely this combination of circumstances that explains why compensation for fire-related losses in commercial properties reaches very high amounts; conversely, without adequate insurance, the business will not survive,” explains Ivo Danče. 

Thieves steal jewellery and a transformer substation 

Stores, offices, warehouses, hangars—these commercial properties store various assets essential to businesses, including unsold goods and equipment. That is why they also end up on thieves’ radar. For example, in one case, thieves broke into a warehouse, stealing goods belonging to the company, and BTA paid out an insurance claim of 37,000 euros for this incident. 

In another incident, thieves broke into a jewellery store in Ogre, smashing the entrance and display case windows, as well as taking gold jewellery and damaging other goods—compensation of 23,000 euros was paid for this incident. At yet another commercial property, thieves stole a transformer substation that was connected to the electrical grid on the property’s premises—compensation of 22,000 euros was paid for the resulting losses. 

Rain causes flooding, but damaged equipment and downtime increase losses 

In recent years, natural disasters—particularly summer storms, heavy rains, and wind—have also caused significant losses to commercial properties. The largest compensation payment for natural disaster damage made by BTA was 290,000 euros for a building damaged by a storm, which suffered a damaged roof, facade, broken windows, waterlogged floors, and other damage. Meanwhile, a claim of 140,000 euros was paid for a storm-damaged building whose 1,800-square-meter basement flooded during heavy rain—with water levels reaching 60 cm and persisting for three days, damage was also caused to the ceilings, walls, and electrical wiring. 

“In cases of rain and flooding, a significant portion of the total losses is caused precisely by damaged equipment, engineering systems, and electrical wiring, the restoration of which is expensive and time-consuming. If water remains in the premises for an extended period, the damage affects not only floors and walls but also hidden structures, which significantly increases the amount of compensation. Similar to situations following fires, companies in these cases often face operational disruptions, the closure of production facilities or warehouses, and logistical disruptions, further increasing total losses. “That is why timely risk assessment and preventive measures are just as important as adequate insurance coverage,” says Ivo Danče.