Navigating Commercial Building Losses

12/21/2020 (Permalink)

Claims involving commercial structures can present a number of challenges to the claim professional. Multiple stakeholders, unique building construction, and the financial impact of business interruption are among several issues that may add complexity to commercial building claims.  Recognizing and understanding those specific issues and taking a systematic approach to loss adjusting for commercial buildings helps cut through potential issues and may ultimately control indemnity and claim expenses for insured parties. When examining commercial losses, adjusters must take into account major considerations. There are multiple stakeholders. Multiple property owners and tenants; primary leases and subleases; mortgages; and liens all impact the investigation of a building loss and are therefore essential considerations in the adjusting process. There is also major consideration to construction uniqueness. Commercial building structures are classified by commercial underwriters into occupancy categories. These occupational categories include habitational, office, institutional, mercantile, service and manufacturing. Each type of occupancy is comprised of unique construction principles and methods. In addition, buildings within each category can greatly vary in terms of size, HVAC, alarm and fire systems, interior finishes, trade fixtures, and tenant improvements.