Commercial property insurance checklist: questions for your broker before renewal
Short answer
Commercial property insurance pays to repair or replace a building and business property damaged by fire, storm or another covered cause, and can pay some lost income. How much it pays after a loss turns on a few terms: valuation, coinsurance, wind and hail deductibles, roof surfacing limits, ordinance or law coverage and the business income waiting period. Each section below explains one of those terms and the questions to ask your broker about it before renewal. State claim deadlines come near the end.
Cloudbreak team · Updated October 26, 2026 · 6 min read · 13 sources
What commercial property insurance covers
The causes of loss a policy covers come in three forms. Basic usually covers listed causes such as fire, windstorm, hail and vandalism. Broad adds causes such as collapse and weight of snow. Special covers every cause the policy does not exclude. Most policies exclude flood, earth movement, and wear and tear.
Ask the broker:
- Which causes of loss form applies to each building, with which exclusions?
- Is flood on a separate policy? A new flood policy takes effect after a 30-day wait.1
Valuation: replacement cost, actual cash value, agreed value
Replacement cost pays to repair or replace with like kind and quality, without deducting depreciation; actual cash value deducts it. In the 2012 ISO Building and Personal Property Coverage Form, actual cash value is the default; replacement cost applies only when the declarations show it, and is paid only after repair or replacement.2
Agreed value sets the building's value in advance and suspends coinsurance until the expiration date the declarations show.
Ask the broker:
- Is each building written at replacement cost or actual cash value?
- Does agreed value apply, and when does it expire?
- Is an inflation guard shown, and at what annual percentage?
Coinsurance and how the penalty works
Coinsurance requires a limit of at least a set share, commonly 80%, 90% or 100%, of the property's value at the time of loss. Below that, the insurer pays the loss times the limit carried over the limit required, minus the deductible.2,3
| Step | Amount |
|---|---|
| Value at time of loss | $250,000 |
| Required limit at 80% | $200,000 |
| Limit carried | $100,000 |
| Paid on a $40,000 loss: $40,000 × 0.50, minus $250 deductible | $19,750 |
| Not covered | $20,250 |
Limits fall behind when building costs rise. For example, a builder estimated a 25,000 square foot building at $80 per square foot, or $2 million, in 2012. By 2016 replacement cost was $2.4 million with the limit unchanged, so under 90% coinsurance a $500,000 loss paid $458,000 after a $5,000 deductible.3
Ask the broker:
- What coinsurance percentage applies to building, business personal property and business income?
- Which replacement cost estimate is each limit based on, and how old is it?
Wind and hail deductibles
A flat deductible is a fixed dollar amount; a percentage deductible is a share of insured value, so it grows with the building's value. ISO endorsement CP 03 21 (2012) sets 1%, 2% or 5% per windstorm or hail occurrence, applied separately to each damaged building and to the personal property in it, as a share of the damaged property's limit (specific insurance) or its value on the latest statement of values (blanket insurance).4
| Item | Building 1 | Building 2 |
|---|---|---|
| Value on statement of values | $500,000 | $500,000 |
| 2% deductible | $10,000 | $10,000 |
| Loss | $40,000 | $20,000 |
| Paid | $30,000 | $10,000 |
Hurricane and named storm deductibles apply only when a trigger occurs, such as the National Weather Service naming a storm. The trigger varies by state and insurer.
Ask the broker:
- What is the wind and hail deductible in dollars for each building?
- Is there a hurricane or named storm deductible, and what starts and ends it?
Roof surfacing limits
ISO endorsement CP 10 36 (2012) is scheduled building by building. Paragraph A values roof surfacing, from shingles and metal sheeting to moisture protection and flashing, at actual cash value even where replacement cost otherwise applies. Paragraph B excludes cosmetic wind or hail damage: marring, pitting or other superficial damage that leaves the roof keeping out the elements as before.5
Ask the broker:
- Does Paragraph A or B of CP 10 36 apply to each building?5
- What roof age and material does the insurer have on file for each building?
Ordinance or law: Coverage A, B and C
Many communities require a building damaged past a set share, typically 50%, to be rebuilt to current code. Standard commercial forms without an endorsement do not cover the undamaged part's value, its demolition or the cost of rebuilding to code; the 2012 ISO form adds only $10,000 or 5% of the building's limit, whichever is less, toward code costs, and only for replacement cost buildings.2,6
| Coverage | Pays | Limit |
|---|---|---|
| A | Value of undamaged parts that code requires to be demolished | Within the building limit |
| B | Demolishing and clearing those undamaged parts | Own or combined B and C limit |
| C | Added cost to repair or rebuild to code minimums | Own or combined limit; paid after rebuilding within 2 years, unless extended |
Ask the broker:
- Which of Coverages A, B and C apply to each building, with what limits?
- Does business income pay for the extra time it takes to meet code? The ISO form's period of restoration leaves it out.
Business income, extra expense and the waiting period
Business income is net income plus continuing expenses, including payroll, and can include rental income from tenants. Extra expense pays costs to avoid or reduce a shutdown. In the ISO form, business income starts 72 hours after the loss and extra expense immediately; extended business income adds up to 60 days after repairs end and operations resume.8
Ask the broker:
- Is rental value included, and is the waiting period 72 hours?8
- How many days of extended business income apply?
Duties after a loss
The ISO property and business income forms require prompt notice; a description of how, when and where the loss happened; reasonable steps to prevent further damage; access to inspect; and a signed, sworn proof of loss within 60 days of the insurer's request.2,8
Texas claim deadlines
| Step | Deadline |
|---|---|
| Acknowledge the claim and request needed items | 15 days (surplus lines: 30 business days) |
| Accept or reject in writing | 15 business days after all items arrive; 45 more days if it gives reasons |
| Pay after accepting | 5 business days (surplus lines: 20 business days) |
| Weather catastrophe or major natural disaster, as the commissioner defines | All deadlines extend 15 days |
In Texas, an insurer that misses these deadlines may owe interest and attorney's fees. On the Texas coast, the Texas Windstorm Insurance Association offers wind and hail coverage, and its time limit to file a claim is one year from the date of loss.1,9,10,11
Ask the broker:
- Is the insurer an eligible surplus lines insurer, with longer Texas deadlines?10
Documents to have ready for renewal
- A statement of values (ACORD 139) listing each building's valuation basis and 100% values, signed by the insured.12
- How each value was set: original construction cost, regional cost guides or an appraisal, trended for inflation if older.
- Roof age and material for each building.
- Claims history. A Texas property and casualty insurer must give the policyholder a written list of claims and payments within 30 days of a written request.10
- Business income figures: 12 months of past results and 12 months of estimates, as the ISO business income agreed value worksheet requires.8
- Sprinkler and fire protection details, which affect the premium.
How Cloudbreak helps
Policy review
Your deductibles, limits, exclusions and roof endorsements read against each property, with questions for your broker; a licensed broker approves every report.
Pre-loss documentation
A dated record of every roof section, elevation and rooftop unit, in photos, drone video and notes, with original files and timestamps intact.
For portfolios
One agreement covers every property, inspections are scheduled wherever your buildings are, and there's no upfront cost.
Questions
- What does commercial property insurance cover?
- It pays to repair or replace buildings and business property, such as equipment and inventory, after a covered cause such as fire. Business income coverage can pay lost net income during repairs.
- What does a commercial property insurance inspection look at?
- Under the ISO Common Policy Conditions (1998 edition), insurer inspections relate only to insurability and premium. They look at what sets the premium: location, construction, sprinklers, occupancy, square footage, loss prevention and fire protection.13
- How does a 2% wind and hail deductible work?
- Under ISO endorsement CP 03 21, 2% of the damaged building's limit, or of its statement of values figure under blanket insurance, is deducted per occurrence: $10,000 for a building listed at $500,000.4
Cloudbreak
The owner-side property protection team for commercial and multifamily owners in storm country: a dated record of every building, nightly storm checks and a review of your policy, before a loss.
Sources
Written by the Cloudbreak team. Numbers, dates and rules cite the published sources below.
- 1. Texas Department of Insurance: Commercial property insurance guide
- 2. Insurance Services Office (copy hosted by Independent Insurance Agents of Texas): Building and Personal Property Coverage Form, CP 00 10 10 12
- 3. IRMI: Property Insurance: Coinsurance
- 4. Insurance Services Office (copy hosted by Independent Insurance Agents of Texas): Windstorm or Hail Percentage Deductible, CP 03 21 10 12
- 5. Insurance Services Office (copy hosted by Independent Insurance Agents of Texas): Limitations on Coverage for Roof Surfacing, CP 10 36 10 12
- 6. IRMI: Ordinance or law coverage
- 7. Insurance Services Office (copy hosted by Independent Insurance Agents of Texas): Ordinance or Law Coverage, CP 04 05 10 12
- 8. Insurance Services Office (copy hosted by Independent Insurance Agents of Texas): Business Income (and Extra Expense) Coverage Form, CP 00 30 10 12
- 9. Texas Department of Insurance: Consumer rights for commercial property insurance
- 10. Texas Legislature: Texas Insurance Code Chapter 542, Processing and Settlement of Claims
- 11. Texas Department of Insurance: Get help with a TWIA complaint
- 12. ACORD (copy hosted by NIF Group): Statement of Values, ACORD 139 (2004/03)
- 13. Insurance Services Office (copy hosted by Independent Insurance Agents of Texas): Common Policy Conditions, IL 00 17 11 98