Commercial Property Insurance in Oregon

Building and Personal Property Coverage (BPP)

Oregon commercial property policies provide coverage for:

Coverage A - Building

• Replacement cost or actual cash value
• Includes permanently installed equipment
• Coinsurance: Typically 80%, 90%, or 100%

Coverage B - Business Personal Property

• Inventory, equipment, furniture, supplies
• Replacement cost or ACV
• Off-premises coverage available

Coverage C - Personal Property of Others

• Customer property in business's care, custody, or control

Coinsurance Requirement

The coinsurance penalty formula is critical:

$\text{Amount Paid} = \frac{\text{Amount of Insurance Carried}}{\text{Amount of Insurance Required}} \times \text{Loss} - \text{Deductible}$

Example: Building valued at $500,000 with 80% coinsurance, insured for $300,000, $100,000 loss:

\text{Amount Paid} = \frac{$300,000}{$400,000} \times $100,000 - \text{deductible} = $75,000 - \text{deductible}

Exam Tip: Know how to calculate coinsurance penalties. Oregon commercial policies commonly use 80% or 90% coinsurance.

Business Income Coverage

Business Income (BI) coverage pays for:

• Lost net income during business interruption
• Continuing operating expenses
• Coverage period: Until property is repaired/replaced
• Waiting period: Typically 48-72 hours

Extra Expense Coverage

• Costs to continue operations during repairs
• Temporary location expenses
• Equipment rental costs

Oregon-Specific Considerations

1. Earthquake Coverage

• Critical for Oregon businesses
• Separate endorsement with high deductibles (10-20%)
• Covers building, contents, and business income losses

2. Wildfire Protection

• Brush clearance requirements
• Fire-resistant construction discounts
• Higher risks in rural Oregon

3. Flood Coverage

• Required through NFIP or private flood insurance
• Willamette Valley flood risks
• Coastal flooding concerns