Earthquake - Commercial Property

Earthshaking Program Updates - Effective Immediately

New Program Application Now Available!

IBAWest, Swett & Crawford, and Alterra Excess & Surplus Insurance Co. announce new improvements to the Commercial Property Earthquake Program. 

• The maximum limit and values have been increased to $3,000,000! 
• The program is now able to accept Frame Construction & All Other Construction buildings built 1950 or later. 
• Tilt-Up & Reinforced Concrete Block Construction dates will remain 1974 or later.
• Older retrofitted buildings may be accepted on a submit basis with the proper documentation. 
• Additionally, we will now accept Habitational Structures with 2 units or more (previously 4 units).   
• The previously required 5 day waiting period to bind coverage for new business has been removed! 
• New business will be effective on the day of receipt of the application and premium, unless a later date is requested. 
• All California counties are open for business!  Due to the unprecedented seismic activity in California in 2010-2011, we encourage you to remind your insureds that complacency is their worst enemy. Please take the opportunity to discuss the necessity of proper coverage with them. 
• Program Administrator at Swett & Crawford is happy to answer any questions at 415-912-3525.

The program underwriter, Alterra Excess & Surplus, is "A" rated from A.M. Best, and is an approved, non-admitted market.

Program Details For New & Renewal Business: 

• Program limits $3,000,000 per location and per insured
• Age limitation for wood frame construction: 1950 and newer – Effective Immediately
• Age limitation for HCB & Tilt-Up Construction Class 1974, "All Other" construction class 1950 and newer. 
• Minimum valuation for buildings: $75 per square foot

Perils insured are earth movement, landslide, mudflow and earth sliding if directly caused by earthquake. Submitted on a self-rating application, the program features are:

Limits/Coverage/Deductibles:

• Policy limits to $3 Million for all coverage per location.   Combined limit for multiple policies per insured is $3 million.
• Coverage available for Buildings, Contents, Rental Income and Business/Interruption/Expense.  15% of policy limit may be allocated to Building Ordinance coverage.  Earthquake Sprinkler leakage on Buildings and Rental Income.
• Deductible Application- The deductible percentage (choice of 2 deductible options) times the Total Insurable Values per building per occurrence.
• Coinsurance – contents subject to 90% Coinsurance Percentage
• Replacement  Cost Valuation

Underwriting Requirements:

• All Wood Frame construction must be bolted to foundation and built in 1950 or later
• Hollow Concrete Block construction must be reinforced and built in 1974 or later
• Concrete Tilt-up built in 1974 or later, “All Other” 1950 or later
• Retrofitted buildings built prior to the age requirement may be considered on a submit basis with the proper documentation
• Buildings with Tuck-Under, Subterranean or Under-Building Parking must be classified, rated and meet the eligibility risk characteristics of HCB Construction Class if less than 6 stories, with the exception of building garages or stalls separated by shear walls, which will take the standard construction class rate.

Eligible Occupancies:

• Commercial Properties; Habitational Structure with 2 units or more
• State Licensed Residential Care Facilities

Additional Information:

• Terrorism Coverage - On July 7, 2003 the United States Department of Treasury issued a final rule excluding Earthquake Insurance from participation under the Terrorism Risk Insurance Act.
• The Independent Insurance Agents and Brokers of California Program has obtained clarification from the California Department of Insurance advising that this program no longer qualifies for participation under TRIA.  Therefore, coverage for Terrorism as provided under TRIA is no longer available for this product.
• Commission 10%

Requirements to place coverage:

• Fully completed signed self-rated application dependent on effective date of policy (See available applications in left-hand column).
• A wet/original signature is not needed.  A signed copy of the application & D1 form are accepted.
• Application to include all building information, occupancy, loss information and inspection contacts
• Policy Premium plus $150 Policy Fee, applicable inspection fee, and all applicable surplus lines taxes & fees.
• Inspection Fee – see page 2 of application “Premium & Fees”