Real Estate Finance: Evaluating Property Insurance Under Current Lender Standards

Determining Replacement Cost, Business Interruption, Flood, Windstorm, Earthquake, Ordinance and Law, and Terrorism Coverage

Recording of a 90-minute premium CLE webinar with Q&A

Conducted on Wednesday, January 11, 2017

Recorded event now available

or call 1-800-926-7926
Course Materials

This CLE course will provide real estate counsel with an understanding of the various components of property insurance and the current requirements of lenders with regard to each type of coverage. The panel discussion will include replacement cost, business interruption, ordinance and law, flood, windstorm, earthquake and terrorism coverage, when each coverage is required, and how coverage amounts are determined.


Evaluation of property insurance has become a complex undertaking in commercial real estate finance. It is often the final item to be resolved in a transaction, in part because insurance companies frequently need information taken from other third-party reports before insurance policies can be finalized.

Real estate counsel must have an understanding of when various insurance policy coverages are required and how they are impacted by the appraisal, title, survey, zoning report and engineering report. Loan document provisions may need to be revised to reflect deal-specific insurance requirements.

Listen as our authoritative panel, consisting of an insurance consultant and closing counsel, discusses replacement cost, ordinance and law, flood, windstorm, earthquake, business interruption and terrorism insurance, and how coverage amounts are determined. They will also discuss how certain coverages are tied to information taken from survey, zoning and other third-party due diligence, how insurance requirements are addressed in the loan documents, and insurance company ratings required by CMBS and other institutional lenders.



  1. Discussion of standard and optional coverages included in property insurance policies
    1. Replacement cost
    2. Business interruption
    3. Ordinance and law
    4. Terrorism
    5. Flood
    6. Windstorm
    7. Earthquake
    8. Boiler and machinery
  2. How third-party due diligence affects the foregoing coverage
    1. Appraisal—breakdown of property value and income calculations
    2. Survey—flood zones, zoning designation and related information
    3. Title—appurtenant easements and other issues
    4. Zoning—conforming vs. legal non-conforming
    5. Engineering report—earthquake zones
  3. Drafting tips with regard to deal-specific insurance provisions
  4. Insurance carrier ratings—lender requirements


The panel will review these and other key issues:

  • What types of coverage are currently required in real estate finance transactions?
  • What information is needed from appraisal, survey, title, zoning, and engineering reports to finalize coverage?
  • How are coverage parameters determined?
  • What are the current rating requirements for insurance carriers, and what do the parties do when the existing carrier is not approved?
  • How are insurance requirements (and deviations therefrom) reflected in the loan documents?


Bordy, Michael
Michael J. Bordy

Michael J. Bordy, A.P.L.C.

Mr. Bordy is a transactional attorney who has 26 years of experience handling a variety of issues in business,...  |  Read More

Hayden, Alexandra
Alexandra Hayden, Esq.

Director, Legal Specialist
Harbor Group Consulting

Ms. Hayden joined the firm in 2014 and serves as a Director, Legal Specialist in the Commercial Real Estate Practice....  |  Read More

Katherina Komisarjevsky
Katherina Komisarjevsky

Chief Operating Officer
Harbor Group Consulting

Mrs. Komisarjevsky is responsible for the management oversight of the firm’s large loan transactions, including...  |  Read More

Smith, Kevin
Kevin D. Smith, CPCU, ARM

CPCU, ARM, Managing Director
The Graham Company

Mr. Smith joined The Graham Company in 1999 and is a Managing Director currently responsible for the firm’s...  |  Read More

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