Citizens Property Insurance Corporation’s board of governors gave its approval Thursday of expanded commercial property insurance coverage for small businesses across Florida.
“Our goal is to make coverage available as quickly as possible to the Florida small business community which is in dire need of commercial coverage,” said Chairman Bruce Douglas during the monthly board meeting.
Florida lawmakers directed the statewide expansion of Citizens’ commercial, non-residential policies during a special session in January. Citizens currently writes commercial non-residential coverage only in high-risk coastal areas.
Under the plan approved by the board, on June 1 Citizens will assume about 850 commercial policies from the Property and Casualty Joint Underwriting Association, which was activated last fall by emergency order of the Financial Services Commission.
On June 1, Citizens will also begin writing, on a short term basis, wind-only coverage for small commercial, non-residential customers across the state.
Jeff Grady, president of the Florida Association of Insurance Agents said Citizens’ expanded coverage for small businesses will fill a void to which the private market can attach itself.
“I think it’s a positive step,” Grady said. “Unfortunately the private market has become an unaffordable option for many small businesses.”
Grady said the private market is not responding at lower levels – especially for wind coverage: “Businesses can’t get the coverage, or the available coverage bankrupts them – and it’s usually under the limits that they need,” he said.
Under the program effective in June, Citizens will provide up to $1 million in wind coverage to business owners with no more than $10 million of total insured value.
Douglas said it was important to get the coverage in place by the start of hurricane season.
By Sept. 1, Citizens will offer a commercial multiperil policy throughout the state that includes wind coverage. The policy will provide the first $2.5 million of building coverage for structures with a value of $20 million or less.
Douglas said after competitive bidding, International Catastrophe Insurance Managers, (ICAT), a Colorado-based service provider, was selected to provide policy administration services for this commercial program.
Source: Citizens Property Insurance Corp.
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