Key Takeaways
- Washington commercial property insurance operates under file and use rate regulation
- Commercial policies require specific disclosure of terrorism coverage options under TRIA
- Washington requires surplus lines brokers to follow specific placement procedures
- Commercial properties in high-risk areas may access the Washington FAIR Plan
- Business interruption coverage has specific Washington disclosure requirements
Last updated: January 2026
Washington Commercial Property Insurance
Washington regulates commercial property insurance with specific requirements for rates, disclosures, and coverage availability.
Rate Regulation
Under Washington's file and use system:
- Rates are filed with OIC before use
- Rates take effect upon filing
- OIC can disapprove rates after review
- Rates must not be excessive, inadequate, or unfairly discriminatory
Commercial Rate Standards
| Standard | Requirement |
|---|---|
| Not Excessive | Reasonable for coverage provided |
| Not Inadequate | Sufficient to pay claims |
| Not Discriminatory | Based on actuarial justification |
Terrorism Insurance
TRIA (Terrorism Risk Insurance Act)
- Federal program providing terrorism insurance backstop
- Washington 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
- Definition of certified acts of terrorism
Commercial FAIR Plan
The Washington 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
Surplus Lines Insurance
Washington allows surplus lines insurance for risks not available in the admitted market:
Surplus Lines Requirements
| Requirement | Details |
|---|---|
| Diligent Search | Must make effort to place with admitted insurers |
| Surplus Lines Broker | Must use licensed SL broker |
| Surplus Lines Tax | 2% of premium |
| Stamping Office | File through Washington stamping office |
| Disclosure | Must disclose SL status to insured |
Eligible Surplus Lines Insurers
- Must be on Washington's approved list
- Meet financial requirements
- Not domiciled in Washington (or certain US jurisdictions)
Export Requirements
Some risks can be placed directly without diligent search:
- Risks specifically approved for export
- Large commercial risks meeting certain thresholds
- Unique or unusual risks
Business Interruption Insurance
Washington has disclosure requirements for 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 explained
Coverage Components
| Component | Description |
|---|---|
| Lost Income | Net income that would have been earned |
| Continuing Expenses | Fixed costs during shutdown |
| Extra Expense | Costs to continue operations |
| Civil Authority | Coverage when access is prohibited |
Inland Marine
Washington regulates inland marine coverage:
- Floaters and scheduled property
- Contractors equipment
- Builders risk
- Electronic data processing equipment
Test Your Knowledge
What is the Washington surplus lines tax rate?
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Test Your Knowledge
Under Washington's rate regulation system for commercial property, when do filed rates take effect?
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Test Your Knowledge
What must a Washington surplus lines broker provide to the insured?
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