Key Takeaways
- Illinois commercial property insurance uses file and use rate regulation
- Commercial policies must disclose terrorism coverage options under TRIA
- Illinois allows surplus lines placement after diligent search of 3 admitted insurers
- Surplus lines tax in Illinois is 3.5% of premium
- Business interruption and extra expense coverage follow standard commercial forms
Last updated: January 2026
Illinois Commercial Property Insurance
Illinois regulates commercial property insurance with specific requirements for rates, surplus lines, and coverage availability.
Rate Regulation
Under Illinois file and use system, commercial property insurance rates:
- May be used upon filing with DOI
- Subject to DOI review after implementation
- Must not be excessive, inadequate, or unfairly discriminatory
- Can be disapproved if DOI finds violations
Commercial Rate Filing
| Requirement | Details |
|---|---|
| Filing | Required before use |
| Approval | Not required before use |
| Review | DOI reviews after implementation |
| Disapproval | DOI can disapprove after review |
Terrorism Insurance
TRIA (Terrorism Risk Insurance Act)
- Federal program providing terrorism insurance backstop
- Illinois insurers must offer terrorism coverage
- Policyholder can accept or reject terrorism coverage
- Disclosure of coverage terms required
Required Disclosures
- Coverage limits for terrorism
- Premium for terrorism coverage
- Right to accept or reject
- Exclusions and limitations
Commercial Property Coverage
Illinois commercial property follows standard ISO forms:
Coverage Types
| Coverage | Description |
|---|---|
| Building | Structure and permanently attached items |
| Business Personal Property | Contents, inventory, equipment |
| Business Income | Lost income during restoration |
| Extra Expense | Additional costs to continue operations |
Surplus Lines Insurance
Illinois allows surplus lines insurance for risks not available in the admitted market:
Surplus Lines Requirements
| Requirement | Details |
|---|---|
| Diligent Search | Must contact 3+ admitted insurers |
| Export List | Some risks pre-approved for export |
| Surplus Lines License | Producer must be licensed |
| Surplus Lines Tax | 3.5% of premium |
| Stamping Office | Illinois Surplus Lines Association |
| Disclosure | Must disclose SL status to insured |
Export List Risks
Illinois maintains a list of risks that can be placed directly with surplus lines insurers without a diligent search:
- Aviation liability
- Excess and umbrella liability
- Employment practices liability
- Directors and officers liability
- Environmental impairment liability
- Professional liability for certain classes
Business Interruption Insurance
Illinois commercial policies include business interruption provisions:
Key Provisions
- Coverage for lost income during restoration period
- Waiting/deductible period (often 72 hours)
- Period of restoration clearly defined
- Extended period of indemnity available
- Civil authority coverage for government-ordered closures
Extra Expense Coverage
- Covers costs to continue operations during restoration
- Separate limit from business interruption
- Examples: temporary location, expedited repairs
Builders Risk
Illinois builders risk insurance:
- Covers buildings under construction
- Available on completed value or reporting form
- Theft coverage may require endorsement
- Transit coverage for materials available
- Typically ends when building is occupied
Test Your Knowledge
How many admitted insurers must be contacted before placing a risk in the Illinois surplus lines market?
A
B
C
D
Test Your Knowledge
What is the Illinois surplus lines tax rate?
A
B
C
D