Insurance Requirements for CA Commercial Properties

two electricians standing next to electrical panelsAs a commercial property owner, it’s crucial to safeguard your valuable real estate assets while ensuring compliance with your insurance company’s guidelines and maintaining your properties to prevent future losses.

In recent years, the California insurance market has faced unprecedented challenges, primarily due to catastrophic wildfires and significant water-related losses. This turmoil has prompted insurance companies to adjust their underwriting guidelines, increase rates, limit coverage in certain areas, and even exit the market. This shift is referred to as a “hard market” in the insurance industry, which may persist for an extended period.

To mitigate future losses and maintain insurance compliance, adhering to specific property maintenance guidelines is essential. We’ve conducted research in collaboration with top insurance partners to identify mandatory requirements for commercial buildings in California. We’re sharing these tips with you to help prevent potential losses.

As a commercial real estate investor, you certainly don’t want your insurance coverage jeopardized due to non-compliance with mandatory requirements or failure to provide evidence of property updates. If your insurance company sends you documentation or a renewal questionnaire, promptly return the requested information. You can reach out to us for assistance in assessing potential electrical risks associated with your property.

Here are some of the newly imposed mandatory electrical requirements for commercial buildings in California:

  • Older buildings constructed before 1990 may need documentation of upgrades to electrical.
  • Buildings with Zinsco or Federal Pacific electrical panels and breakers must replace them due to safety concerns. These panels are outdated, prone to over-current and arcing, and no longer meet underwriting standards.
  • Install Ground Fault Circuit Interrupter (GFCI) receptacles in specific areas, such as kitchens, bathrooms, basements, laundry rooms, garages, and outdoor outlets. Consult an electrician to ensure compliance with local electrical codes.

These requirements represent the new standards set by insurance companies in California for both new insurance policies and policy renewals. Many insurers are conducting inspections and sending out renewal questionnaires to ensure property owners comply with these guidelines. If any repairs, updates, or maintenance are needed, property owners will be required to make these changes to maintain or obtain coverage.

As specialists in commercial electrical services, we aim to keep you informed about these changes and help you secure adequate protection for your commercial real estate portfolio. If you have questions or need further information, please give us a call at (619) 638-0228.