Commercial Property Claims: Large Loss Strategy

Commercial property claims are fundamentally different from residential claims. They involve larger losses, complex documentation, business interruption coverage, and sophisticated insurer tactics to minimize payout.

We've recovered over $50M in commercial claims across Florida. Here's what you need to know.

Commercial Coverage Types

Property Damage

Covers the building and structures. Typically includes:

• Building envelope damage (roof, walls)
• HVAC/mechanical systems
• Interior fixtures and finishes
• Optional: Equipment coverage

Business Interruption

Covers lost profits and operating expenses while closed for repairs. This is often the largest recovery but most commonly underpaid.

• Lost gross profit
• Payroll continuation (sometimes)
• Rent/mortgage (sometimes)

Workers' Compensation (if in place)

Covers worker injuries from the loss.

Equipment Breakdown

Optional coverage for machinery and mechanical equipment failure.

Common Commercial Claims

• Storm damage to retail centers: Roof damage, interior water damage, lost sales during closure
• Industrial fire: Building damage plus business interruption (often 2-3x the structure value)
• Restaurant/hotel flood: Property + inventory + BI for extended closure
• Manufacturing facility loss: Equipment, inventory, supply chain impact

Why Commercial Claims Are Complex

1. Coverage Interpretation

Commercial policies are heavily negotiated and customized. Each clause can be interpreted multiple ways. Insurers will interpret them against you.

2. Business Interruption Valuation

BI claims require:

• Proof of prior-year earnings (tax returns, profit/loss)
• Reasonable closure timeline estimates
• Demonstration of business loss causation

Insurers routinely:

• Dispute the closure timeline ("You should have reopened faster")
• Argue the loss was market-driven, not loss-driven
• Claim expenses weren't necessary (denying payroll continuation)

3. Scope Documentation

Commercial losses require comprehensive assessment:

• Structural engineering reports
• Building code compliance reviews
• Equipment replacement specifications
• Supply chain analysis

Documentation Requirements

Commercial claims need extensive documentation:

Property Damage

• Professional loss assessment report
• Engineering inspection (if structural damage)
• Photos/video of all damaged areas
• Detailed repair scope and cost estimates
• Code upgrade requirements (ADA, fire codes, etc.)

Business Interruption

• Prior-year tax returns (3 years)
• Monthly profit/loss statements
• Customer/tenant lists and lease agreements
• Payroll records
• Reconstruction timeline from contractors
• Market analysis (what portion of loss was COVID/market vs. loss-caused)

Strategic Approach

1. Hire a PA Immediately

For commercial claims over $100,000, hire a PA within days of the loss. We:

• Conduct comprehensive loss assessment
• Identify all coverage triggers
• Gather expert documentation
• Estimate realistic closure timeline

2. Preserve the Claim Timeline

Document when you:

• Discovered the damage
• Began repairs
• Reopened for business

Insurers will argue you reopened "too quickly" (low BI payout) or "too slowly" (your problem, not theirs). Timeline proof matters.

3. Get Expert Assessments

For significant claims, hire:

• Structural engineer: Damage assessment and repair scope
• Business valuator: BI loss valuation
• Contractor: Realistic closure timeline
• Accountant: Financial loss documentation

4. Negotiate Early

Commercial insurers often know low estimates will be challenged. Early negotiation with expert documentation can resolve disputes faster than appraisal/litigation.

Code Upgrade Issues

When commercial buildings are damaged, rebuilding often requires:

• Updated building codes
• ADA compliance improvements
• Fire suppression system upgrades

Insurers often exclude these costs. But if the original construction violated codes, you can argue the upgrade was necessary. This can add 15-30% to recovery.

Real Example: Multi-Million Dollar Retail Claim

A 50,000 sq ft retail center suffered hurricane damage. Initial insurer assessment: $2.1M property damage. No BI coverage was offered.

A public adjuster hired structural engineers and business valuators who found:

• $3.4M property damage (including code upgrades)
• $1.8M in business interruption loss (proper BI calculation)

Final recovery: $5.2M vs. initial $2.1M offer. Difference: $3.1M.

Timeline for Commercial Claims

• Days 1-7: Loss assessment, PA hired, initial documentation
• Weeks 2-4: Expert reports commissioned, scope finalized
• Month 2: Formal claim submitted, insurer begins evaluation
• Month 3-6: Negotiation phase
• Month 6+: Appraisal or litigation if needed

Bottom Line

Commercial claims are too complex and too valuable to handle alone. The difference between proper representation and no representation is often millions of dollars. Hire a PA with commercial experience. It will pay for itself 10x over.