Commercial Property Insurance

What is commercial property insurance?

Commercial property insurance is a type of insurance that protects businesses against potential financial losses due to damage to their physical property, such as buildings, equipment, and inventory. In Florida, this coverage is essential for businesses as it helps safeguard against the financial impact of natural disasters, theft, and other unforeseen events that could damage a company’s property.

For example, a restaurant owner may require commercial property insurance to protect against damages from a hurricane, which could result in flooding, structural damage, and loss of inventory. Another example could be a retail store owner who needs coverage to protect against potential theft or vandalism of their merchandise and store fixtures.

Need help with a matter related to commercial property insurance? Schedule your consultation today with a top insurance attorney.

In Florida, which laws and regulations relate to commercial property insurance?

In Florida, commercial property insurance is regulated by the Florida Office of Insurance Regulation (OIR). The OIR oversees the insurance industry to ensure compliance with state laws and regulations, including those related to commercial property insurance. Some key Florida statutes and regulations governing commercial property insurance include:

1. Florida Statute § 627.701, which outlines the basis for settling property insurance claims, including valuation methods and requirements for timely payment.
2. Florida Statute § 627.706, which governs sinkhole insurance, a specific concern for Florida businesses due to the state’s unique geological conditions.
3. Florida Statute § 627.409, which addresses material misrepresentation in insurance applications and the consequences for policyholders who provide false information.

What are common disputes regarding commercial property insurance that lead to litigation?

The following disputes are among the most common in actions regarding commercial property insurance in insurance procurement and coverage matters:

• Valuation Disputes: Conflicts often arise between policyholders and insurers over the proper valuation of property, whether it is the replacement cost, actual cash value, or another method of calculation.
• Policy Exclusions: Disagreements may occur over whether specific exclusions within a policy apply to a given situation, such as flood, windstorm, or other damage exclusions.
• Scope of Coverage: Disputes may arise over the interpretation of the policy language and the extent to which it covers a particular loss, such as business interruption coverage or contingent business interruption.
• Bad Faith: Policyholders may allege that the insurance company acted in bad faith by unreasonably delaying or denying a claim, misrepresenting policy terms, or failing to investigate a claim adequately.
• Loss Adjustment: Conflicts may develop over the loss adjustment process, including disagreements regarding the interpretation of policy provisions or the calculation of damages.

We are value-based attorneys at Jimerson Birr, which means we look at each action with our clients from the point of view of costs and benefits while reducing liability. Then, based on our client’s objectives, we chart a path forward to seek appropriate remedies.

To determine whether unique situation may necessitate litigation, please contact our office to set up your initial consultation.

What measures should an insurance carrier take to minimize the risk of litigation over commercial property insurance? 

To successfully mitigate the risk of litigation over commercial property insurance in insurance procurement and coverage matters, insurance carriers should take the following steps:

• Clear Policy Language: Draft policies with clear and concise language to minimize ambiguity and the potential for misinterpretation.
• Timely Claims Processing: Promptly investigate, evaluate, and respond to claims to avoid allegations of bad faith or unreasonable delay.
• Effective Communication: Maintain open lines of communication with policyholders to address concerns and answer questions.

What must be proven to successfully file a lawsuit regarding commercial property insurance, and what are common legal defenses to those claims? 

Procedurally, a plaintiff must comply with the notice provisions and deadlines set forth in the insurance policy, as well as any applicable Florida and federal statutes and regulations. This includes timely filing of the lawsuit and ensuring proper service upon the defendant insurance company.

In a commercial property insurance lawsuit, the plaintiff must typically prove the following elements:

• Existence of a valid insurance policy covering the plaintiff’s property;
• Covered loss or damage occurred during the policy period;
• Compliance with policy conditions, such as providing timely notice and proof of loss; and
• The insurer failed to pay the claim or undervalued the claim in violation of the policy terms.

Common legal defenses raised against commercial property insurance claims include:

• Policy Exclusions: The insurer argues that the loss or damage is excluded from coverage under the policy terms.
• Late Notice: The insurer claims that the policyholder failed to provide timely notice of the loss, as required by the policy.
• Misrepresentation or Concealment: The insurer alleges that the policyholder misrepresented or concealed material facts when obtaining the policy or submitting the claim.
• Failure to Mitigate Damages: The insurer contends that the policyholder did not take reasonable steps to minimize the damage after the loss occurred.

To see what actions or defenses may be available for your unique situation, please contact our office to set up your initial consultation.

Frequently Asked Questions

What types of risks are covered by commercial property insurance in Florida?

Commercial property insurance in Florida covers a wide range of risks, including damages from natural disasters like hurricanes, theft, vandalism, and fires. It typically covers the building, its contents, and any outdoor fixtures like signs or fences. However, it’s essential to review your specific policy for coverage details, as each policy can vary.

How does Florida’s unique environment affect commercial property insurance?

Florida’s unique environment, characterized by its frequent hurricanes and storm surges, leads to higher commercial property insurance premiums compared to other states. Insurers factor in the risk of these natural disasters when calculating premiums, which may result in higher costs for businesses located in areas prone to these events.

What steps can a business take to mitigate risks and potentially lower their commercial property insurance premiums in Florida?

To mitigate risks and potentially lower their commercial property insurance premiums, businesses in Florida can implement various measures. Installing hurricane-resistant windows and doors, elevating equipment above flood levels, and having a well-maintained fire suppression system can help reduce risks and might result in lower premiums. Additionally, working with an experienced insurance agent familiar with the unique risks in Florida can help businesses find the best coverage options and potentially secure discounts.

Have more questions about a commercial property insurance-related situation?

Crucially, this overview of commercial property insurance does not begin to cover all the laws implicated by this issue or the factors that may compel the application of such laws. Every case is unique, and the laws can produce different outcomes depending on the individual circumstances.

Jimerson Birr attorneys guide our clients to help make informed decisions while ensuring their rights are respected and protected. Our lawyers are highly trained and experienced in the nuances of the law, so they can accurately interpret statutes and case law and holistically prepare individuals or companies for their legal endeavors. Through this intense personal investment and advocacy, our lawyers will help resolve the issue’s complicated legal problems efficiently and effectively.

Having a Jimerson Birr attorney on your side means securing a team of seasoned, multi-dimensional, cross-functional legal professionals. Whether it is a transaction, an operational issue, a regulatory challenge, or a contested legal predicament that may require court intervention, we remain a tireless advocate every step of the way. Being a value-added law firm means putting the client at the forefront of everything we do. We use our experience to help our clients navigate even the most complex problems and come out the other side triumphant.

If you want to understand your case, the merits of your claim or defense, potential monetary awards, or the amount of exposure you face, you should speak with a qualified Jimerson Birr lawyer. Our experienced team of attorneys is here to help. Call Jimerson Birr at (904) 389-0050 or use the contact form to set up a consultation.

Here are some blogs written by JB attorneys that provide more information about commercial property insurance:

• An Insurer’s Duty to Defend the Insured (jimersonfirm.com)
• Benchwarmer Effect: The Sobering Reality of Coblentz Agreements (jimersonfirm.com)