Key Takeaways
- Pennsylvania commercial property insurance must comply with filed rates and forms
- Commercial policies require specific disclosure of coverage terms and limitations
- Surplus lines coverage is available for risks not covered by admitted insurers
- Pennsylvania has specific requirements for business interruption coverage
- Terrorism coverage must be offered under TRIA for eligible commercial policies
Pennsylvania Commercial Property Insurance
Pennsylvania regulates commercial property insurance with specific requirements for rates, forms, and coverage availability.
Rate and Form Regulation
Pennsylvania commercial property insurance must comply with state requirements:
Filing Requirements
| Requirement | Details |
|---|---|
| Rate Filings | Must be filed with the Department |
| Form Filings | Policy forms must be approved |
| Prior Approval | Required for most personal lines |
| Commercial Lines | File-and-use with exceptions |
Commercial Rate Review
- Rates must not be excessive, inadequate, or unfairly discriminatory
- Department reviews rates for compliance
- Market competition considered in commercial lines
- Large commercial accounts may have more flexibility
Commercial Coverage Types
Building Coverage
- Covers the commercial structure
- Improvements and betterments
- Fixtures and permanently installed equipment
- Based on replacement cost or actual cash value
Business Personal Property
- Inventory and stock
- Furniture and fixtures
- Equipment and machinery
- Property of others in your care
Business Interruption
Pennsylvania requires clear disclosure for business interruption coverage:
| Element | Must Disclose |
|---|---|
| Covered Perils | What triggers coverage |
| Waiting Period | Deductible period |
| Period of Restoration | How long coverage lasts |
| Coinsurance | Requirement and penalty |
| Extra Expense | If included or separate |
Surplus Lines Insurance
Pennsylvania allows surplus lines insurance for risks not available in the admitted market:
Surplus Lines Requirements
| Requirement | Details |
|---|---|
| Diligent Search | Must attempt placement with admitted insurers |
| Surplus Lines Broker | Must use licensed SL broker |
| Eligible Insurers | Must be on approved alien insurer list |
| Surplus Lines Tax | 3% of premium |
| Disclosure | Must disclose SL status to insured |
Diligent Search
Before placing with a surplus lines insurer:
- Document attempts to place in admitted market
- Obtain declinations or quotes showing unavailability
- Maintain records of diligent search efforts
Export List
Pennsylvania maintains a list of certain risks that may be placed directly with surplus lines insurers:
- Unique or unusual risks
- Risks with limited market availability
- Large commercial accounts
Terrorism Insurance
TRIA Requirements
Under the Terrorism Risk Insurance Act (TRIA):
| Requirement | Details |
|---|---|
| Must Offer | Terrorism coverage must be offered |
| Disclosure | Coverage terms must be disclosed |
| Policyholder Choice | Can accept or reject |
| Premium | Disclosed separately |
Required Disclosures
- Coverage limits for terrorism
- Premium for terrorism coverage
- Right to accept or reject
- Federal backstop provisions
- Exclusions and limitations
Builder's Risk and Installation
Pennsylvania commercial property insurance includes specialized coverages:
Builder's Risk
- Covers structures under construction
- Materials and supplies
- Property of others
- Soft costs coverage available
Installation Floater
- Equipment being installed
- Materials in transit
- Property at installation site
What is the Pennsylvania surplus lines tax rate?
What must a Pennsylvania producer do before placing coverage with a surplus lines insurer?