TL;DR – The Big Takeaways
- A business in Florida lost hundreds of thousands due to inadequate insurance.
- Their policy only covered business personal property—not enough.
- Co-insurance penalties slashed their already-limited payout.
- No business interruption coverage meant months of lost income.
- A public adjuster could have protected them before and after the fire.
- Learn more about the benefits of using a public adjuster before you end up in a similar situation.
When Disaster Strikes and Insurance Falls Short
Recently, we were called out to a business that had suffered a serious fire over the weekend. The commercial kitchen was completely destroyed. The exterior of the building was damaged. Smoke had invaded every inch of the space—into carpets, drywall, insulation, electronics, and even toys and books.
The business was a tenant operating in a rental property, which complicated matters. There were two parties affected: the business owner and the landlord. And who pays for what damage? That depends on two key documents:
- The Lease Agreement
- The Insurance Policies of both parties
In this case, the business was operating under a triple net lease, meaning the tenant was responsible for nearly all property damages except structural components, the roof, and the HVAC system (under normal wear and tear).
Even more importantly, the lease required the tenant to carry a $500,000 policy for property coverage, while the landlord was obligated to maintain a fire insurance policy—but the tenant had to reimburse those premiums and deductibles.
The Real Horror: Insufficient Insurance Coverage
Here’s where the situation gets truly alarming. The tenant had only a basic commercial insurance policy—with just $150,000 in business personal property coverage.
That might sound like a lot, but consider this: the commercial kitchen alone had about $200,000 worth of damage.
That’s already a $50,000 gap.
But it gets worse.
For a breakdown on how fire insurance claims are handled and what coverage to look for, see our full guide on rising from the ashes after a fire.
Co-Insurance Penalties: The Hidden Trap That Slashes Your Payout
The policy had a co-insurance clause—a term many business owners don’t even realize they’ve agreed to. In this case, the co-insurance clause required the policyholder to maintain at least 80% of the property’s value in coverage. If they didn’t, they’d face a penalty.
Let’s break it down:
- Actual property value: $500,000
- Coverage required: 80% of $500,000 = $400,000
- Actual coverage: $150,000
- Underinsured by: 62.5%
That means any payout is reduced by 62.5%. So if damages total $200,000, the insurance might only pay out $75,000.
To avoid pitfalls like these, don’t fall for this common insurance check trap that could leave your business financially exposed.
No Business Interruption Coverage? That’s a Revenue Killer
Another massive oversight: the business owner had no business interruption insurance.
This type of policy covers the income you lose while your business is shut down or reduced after a covered event, like a fire. It can also help pay for:
- Temporary space (like renting a kitchen elsewhere)
- Equipment rentals
- Ongoing expenses (payroll, utilities, etc.)
Without it, this business owner is not only facing physical damage—but also months of lost revenue with no reimbursement.
Don’t overlook your policy’s limits. Business owners often believe in myths about public adjusting that keep them from seeking expert help until it’s too late.
Liability Insurance: A Rare Bright Spot
Thankfully, the business had a separate liability insurance policy. If someone had been injured during the fire and sued, this policy would cover legal costs. Lawsuits from injured tenants, customers, or vendors can easily reach six figures—just another reason to ensure your policy is airtight.
How a Public Adjuster Could Have Saved This Business
At Panther Public Adjusting, we work with businesses across Florida—from Miami to Tampa, Venice to Ruskin—to review policies, identify coverage gaps, and represent them in claims when disaster strikes.
If this business had consulted a public adjuster:
- We could’ve reviewed the lease and insurance policy to flag red flags.
- We could’ve advised on increasing coverage limits before the fire.
- We would’ve fought for a maximum settlement from the insurance company post-loss.
Don’t let a small policy destroy your business. Our experts are here to make sure you’re fully covered—and fully compensated.
For an example of how small oversights add up fast, check out our post on why taking pictures after damage is absolutely essential.
Do You Know What Your Policy Covers?
Don’t wait for disaster to find out. Send us your policy for a free review today.
📞 Call us now at 833-726-8437
📩 Email us at Claims@PantherPA.com
💬 Use our online form at PantherPA.com/#contact
Florida Business Owners: We’re Fighting for You
Panther Public Adjusting proudly helps business and property owners across Florida. Whether you’re in Sarasota, Saint Petersburg, or Palmetto, we’ll help you review your policy, handle your claim, and fight for the maximum payout you’re entitled to.
Explore how our team can help you in:
Also, if your business was affected by hurricane damage, check out our guide on tarping and protecting your property.
For water-related emergencies, see our tips on mastering bathroom leak repairs.
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FAQs
1. What is a co-insurance clause and how does it affect my claim?
A co-insurance clause requires you to insure your property for a certain percentage (commonly 80%) of its total value. If you insure for less, your insurance payout is reduced proportionally. It’s a major factor in underpayment and is often misunderstood.
2. What’s the difference between business personal property coverage and business interruption insurance?
Business personal property coverage pays to repair or replace physical contents (like equipment and inventory). Business interruption insurance covers lost revenue and operating expenses when your business can’t operate due to a covered loss.
3. How can a public adjuster help me if I’ve already filed a claim?
Even if you’ve started a claim, a public adjuster can step in to handle communications, challenge denied or underpaid claims, properly document damages, and fight for a much higher payout than most business owners can secure on their own.