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A sudden fire, storm, or other loss can put a business on pause, and the costs can add up fast. Commercial property insurance is meant to help get businesses back on track after disaster strikes, but it’s important to understand what these policies typically do and do not cover. In addition, business owners should be aware of the potential problems that can arise when filing a claim, as well as how to respond.
Read This Before You File a Commercial Property Claim
Commercial property insurance policies are often confusing to understand. Every loss is evaluated differently, which makes it hard to know what you are truly entitled to recover. An experienced property insurance claims lawyer can review your policy, document the full scope of damage, and push back when the insurance company tries to minimize your payout.
Commercial Property Insurance: Covered Perils
Commercial property insurance is designed to protect the physical assets that are critical to your business. Most policies focus on covering three main categories of property:
- The building: Walls, roof, permanently installed fixtures, and completed additions
- Business personal property: Machinery, furniture, electronics, tools, and inventory kept at the insured location.
- Personal property of others: Items in your care, custody, or control (although these claims are typically paid out to the owner of the property)
Claims may be paid out in the event that damage is caused by a covered peril, which generally includes fire, lightning, explosion, wind, smoke, vandalism, and theft. Some policies also cover damage from vehicles, aircraft, or sprinkler leakage.
Some policies offer endorsements that expand coverage beyond the standard causes of loss. For example, business interruption coverage can help replace lost revenue and cover continuing expenses while your business recovers from a covered loss. Extra expense coverage may pay reasonable costs to reduce downtime, such as renting temporary space or expediting repairs. While endorsements can provide valuable added protection, the core policy and its listed causes of loss remain the foundation of coverage.
What Commercial Property Insurance Might Not Cover
Knowing what is excluded from your policy is just as important as understanding what it covers. Many disputes happen because business owners assume their insurance will cover every type of loss, when in fact policies leave out certain events and situations.
Standard commercial property policies often exclude certain natural events. For example, most do not cover:
- Floods, storm surge, or surface water
- Earth movement, mudflow, or landslides
In Florida, where flood risk is high, businesses typically need a separate policy through the National Flood Insurance Program (NFIP) or a private insurer to protect against these losses.
Other common exclusions include:
- Damage from gradual deterioration or maintenance issues, such as corrosion, latent defects, or long-term leaks.
- Losses caused by governmental action, fines, or penalties.
- Intentional or dishonest acts, whether by the owner or employees.
- Certain property types, such as money, securities, outdoor signs, landscaping, foundations, or underground piping, may require specific endorsements to be insured.
- Business interruption coverage is often limited to direct physical damage to covered property, so disruptions caused by off-site events or utility failures may not be covered unless additional endorsements apply.
Common Challenges Commercial Property Owners Face When Filing a Claim
Many property owners expect the claims process to be straightforward, but problems can arise quickly and unexpectedly, from delays to denials. While some of these issues are part of normal claims handling, some may involve unfair or improper practices. In certain cases, these actions could rise to bad faith, which occurs when an insurer intentionally mishandles a claim, acts unfairly, or fails to meet its obligations to the policyholder.
Delays
Insurers often request multiple inspections, additional documentation, or engineering reports. Sometimes this is a legitimate part of the investigation. Other times, delays are unnecessary and may put pressure on business owners, hoping they will accept a lower settlement when one is finally offered.
Underpayments
Insurers may offer less money than the claim is actually worth. This can happen if they underestimate repair costs, apply outdated or low pricing, or overlook necessary upgrades to meet current building codes. Disagreements about what was damaged or what caused the loss can also reduce the payout.
Denials
Claims may be denied for reasons like policy exclusions, late notice, pre-existing damage, or disputes over whether the damage occurred suddenly or gradually. Some denials are legitimate, while others may be unfair or aimed at avoiding payment of a valid claim.
How a Florida Property Insurance Dispute Lawyer Can Make a Difference
If your insurer is slow to process your claim, offers a settlement that doesn’t reflect the true cost of your losses, or denies your claim entirely, you don’t have to accept it. You have the right to have your claim handled in a timely manner and to challenge your insurer’s decision if you disagree with it. However, it’s important to have a Florida property insurance lawyer on your side when doing so. A lawyer can:
- Review your policy and claim in detail to identify coverage, limits, and potential gaps.
- Gather and organize evidence, including repair estimates, invoices, photos, and records of lost business income, to fully support your claim.
- Coordinate with experts such as engineers, accountants, or appraisers to ensure damages and losses are properly valued.
- Challenge improper adjustments, including low depreciation calculations, inaccurate repair scopes, or disputes over necessary code upgrades.
- Handle communications and negotiations with the insurer to ensure deadlines are met and your claim is taken seriously.
- Pursue legal remedies when necessary, including litigation or appraisal, to secure fair compensation.
With a lawyer managing these steps, you can focus on running your business while having confidence that your claim is being pursued aggressively and accurately.
Tips for Minimizing Commercial Property Risks
- Notify your insurer promptly. Give initial notice as soon as possible after a loss to meet policy requirements.
- Document the damage thoroughly. Take photos, videos, and detailed notes of affected areas, equipment, and inventory.
- Gather supporting records. Keep invoices, maintenance logs, receipts, and any proof of business income to support your claim.
- Organize estimates and repair plans. Collect detailed repair or replacement quotes from contractors or service providers.
- Understand your policy. Know your coverage limits, deductibles, exclusions, and any endorsements that may apply.
- Follow up consistently. Track communications with your insurer, respond to requests promptly, and keep a record of all interactions.
- Seek professional guidance early. If you encounter delays, underpayments, or denials, consider consulting a property insurance lawyer in Florida to protect your claim.
Problems With Your Claim? Call a Property Insurance Claims Attorney at Levin Litigation
Insurance is supposed to be a safety net, not a roadblock. If you are facing delays, a lowball estimate, or a denial, it’s time to reach out for legal help. Levin Litigation helps commercial property owners in Florida put the pressure on insurers when they refuse to play fair. We focus on the evidence, policy language, and other details so you can focus on operations. Reach out to schedule a free consultation with a property insurance attorney.
