Hurricanes and Commercial Insurance Premium Financing

With hurricane season right around the corner, now is a good time to think about possible hurricane provisions on your insureds’ commercial property risks.

You may or may not know that many insurance companies include hurricane or seasonal earning provisions or endorsements in some of their commercial property policies. The endorsement will change the standard premium earning of the policy. It is important to note that they may not be limited to traditional hurricane areas such as Florida, Texas or the Southeast coastline. It is critical to review the policy language carefully, even when quoting a renewal as policies can change from year to year.

The Hurricane minimum earned premium endorsement generally runs from June 1st to November 1st. If you cancel a policy that has this endorsement, remove a location or reduce the amount of Insurance on a location, and coverage existed any time during the period of June 1st to November 1st, the amount of unearned premium returned will be significantly reduced based on an earnings chart provided in the policy/endorsement. Typically, the minimum earned premium amount with this endorsement is 75% or 80%.

A very important point to remember is that just because a policy might have this very high minimum earned premium doesn’t mean that the policy can’t be financed. It very well may be depending on the amount of the premium, any other policies being financed, the financial strength of the insured and several other factors.

The bottom line is to be aware of the potential for the hurricane or seasonal earning premium endorsement in your insureds’ policies and don’t rule out premium financing as a payment option for your insured. If you would like any assistance with your situation, please contact us at 866-381-6501 or