Key Takeaways
- Colorado commercial property insurance operates under the file-and-use rating system
- Commercial policies require specific disclosure of terrorism coverage options under TRIA
- Surplus lines brokers must follow specific placement procedures including diligent search
- Commercial properties in high-risk areas may need Colorado FAIR Plan commercial coverage
- Business interruption and extra expense coverage are important for Colorado businesses
Last updated: January 2026
Colorado Commercial Property Insurance
Colorado regulates commercial property insurance with specific requirements for rates, disclosures, and coverage availability.
Rate Regulation
Under Colorado's file and use system, commercial property insurance rates:
- Are filed with DOI before or upon use
- Do not require prior approval for most lines
- Can be disapproved if excessive, inadequate, or unfairly discriminatory
- Are subject to market competition
Commercial Lines Rate Filing
| Line | Filing Requirement |
|---|---|
| Commercial Property | File and use |
| Commercial Auto | File and use |
| Workers' Compensation | Separate requirements |
| Commercial Liability | File and use |
Terrorism Insurance
TRIA (Terrorism Risk Insurance Act)
- Federal program providing terrorism insurance backstop
- Colorado insurers must offer terrorism coverage
- Policyholder can accept or reject terrorism coverage
- Disclosure of coverage terms required
Required Disclosures
- Coverage limits for terrorism
- Premium for terrorism coverage
- Right to accept or reject
- Exclusions and limitations
- Definition of certified act of terrorism
Commercial FAIR Plan
The Colorado FAIR Plan also serves commercial properties:
Commercial Coverage
- Basic fire and extended coverage
- Building and business personal property
- Higher limits available than residential
- Requires evidence of voluntary market declination
- Coverage for businesses in high-risk areas
Surplus Lines Insurance
Colorado 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 |
| Surplus Lines Tax | 3% of premium |
| Disclosure | Must disclose SL status to insured |
| Eligible Insurers | Must be on DOI eligible list |
When Surplus Lines Are Appropriate
- Unique or unusual risks
- High-value properties
- Hard-to-place commercial risks
- Risks declined by admitted market
- Specialized coverage needs
Business Interruption Insurance
Colorado businesses should understand business interruption coverage:
Key Provisions
- Must clearly define covered perils
- Waiting/deductible period disclosed
- Period of restoration defined
- Extended period of indemnity options
- Civil authority coverage requirements
Coverage Elements
| Coverage | Purpose |
|---|---|
| Lost Income | Replaces lost profits during restoration |
| Continuing Expenses | Covers ongoing fixed costs |
| Extra Expense | Additional costs to stay operational |
| Civil Authority | Coverage when access is prohibited |
Extra Expense Coverage
- Covers costs to continue operations during restoration
- Separate limit from business interruption
- Important for businesses that cannot afford downtime
- Colorado requires clear disclosure of coverage terms
Test Your Knowledge
What is the Colorado surplus lines tax rate?
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Test Your Knowledge
Under TRIA, what must Colorado insurers do regarding terrorism coverage?
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