The one loss property policies exclude.
Earthquake coverage for apartment buildings, retail and office buildings, warehouses and the businesses inside them.
By Sam Alishahi · CA Insurance License #4348151 · Reviewed November 2026 · How this page is researched
Commercial property excludes earthquake
Standard commercial property policies exclude earth movement. The California Earthquake Authority writes residential policies only, so commercial buildings are insured through private earthquake markets, either as a separate policy or a difference-in-conditions policy.
Coverage can include the building, business property and improvements, business income or rental value, and items like signs, pools and fences. Lenders sometimes require it on larger or older buildings. I place commercial earthquake based on the building's construction, age, retrofit work and values.
- BuildingStructural damage from shaking, above the deductible.
- Business propertyEquipment, inventory and tenant improvements.
- Income or rentsLost business income or rental value while repairs are made.
- Other structuresSigns, pools, fences and similar items, when scheduled.
What underwriters will ask
Having these ready means I can go to market on the first call. The quote form asks for the same things, and anything you don’t know yet can wait.
- Building: address, year built, stories, square footage.
- Construction: frame type and foundation.
- Retrofit: any seismic retrofit and when it was done.
- Values: building, contents and annual income or rents.
- Loan: any lender earthquake requirement.
- Current coverage: property policy and any earthquake policy.
Retrofit orders in Los Angeles and San Francisco
If your building is under a city retrofit order, an underwriter will ask about it.
Los Angeles soft-story (Ordinances 183893 and 184081)
This program covers wood-frame buildings of two or more stories, built under building code standards enacted before January 1, 1978, that have ground-floor parking or similar open floor space. It does not apply to residential buildings with three or fewer units. LADBS sent orders in priority groups from May 2, 2016 through November 6, 2017. The last group, on November 6, 2017, was condos and commercial buildings. From the date an owner received the order, the deadlines are:
- 2 years: proof of a previous retrofit, or plans to retrofit or demolish.
- 3.5 years: a permit to start construction or demolition.
- 7 years: construction complete.
Because the scheduled orders went out in 2016 and 2017, the seven-year construction period has already ended for those buildings.
Los Angeles non-ductile concrete
This program covers concrete buildings with a roof or floor supported by a concrete wall or concrete column, where the plans were submitted for plan check before January 13, 1977. It is covered whether or not LADBS has identified it yet. From receipt of the order, the deadlines are:
- 3 years: a completed checklist, so LADBS can decide whether the building is non-ductile concrete.
- 10 years: proof of a previous retrofit, or plans to retrofit or demolish.
- 25 years: construction complete.
You can check whether yours is in scope on the LADBS Permit & Inspection Report.
San Francisco
San Francisco runs a mandatory soft-story program for some wood-frame, multi-family buildings. Administrative Bulletin 106 sets the implementation procedures and Administrative Bulletin 107 the engineering criteria. The city publishes a soft-story property list you can search.
If your building has been through either city's program, send me the permit and the completion sign-off with your apartment or mixed-use submission.
Unreinforced masonry buildings
California's law on unreinforced masonry (URM) buildings is in Government Code section 8875 and the sections after it. It applies to cities, and the parts of counties, in seismic zone 4.
- Local inventory and owner notice: Local building departments had to identify potentially hazardous buildings on or before January 1, 1990, and the information was filed with the Seismic Safety Commission. Each local mitigation program had to notify owners that their building is a type that has historically shown little resistance to earthquake motion. Compliance is the owner's responsibility, and the state and local governments are not required to pay for strengthening private buildings (section 8875.2).
- The guide at sale: Since January 1, 1993, the seller of a URM building with wood-frame floors or roofs built before January 1, 1975, or the seller's agent, must give the buyer a copy of the Commercial Property Owner's Guide to Earthquake Safety as soon as practicable before the sale (section 8875.6).
- The entrance sign: In seismic zone 4, an owner with actual or constructive notice that a building is URM must post a sign at least 5 by 7 inches in a conspicuous place at the entrance saying it is an unreinforced masonry building. For a building that has not been retrofitted under an adopted local ordinance or mitigation program, the statute calls for a larger sign, at least 8 by 10 inches, beginning with "Earthquake Warning," and lets the local building department fine owners in that situation who do not comply (section 8875.8).
For a URM building, an underwriter will want to know whether it was strengthened, when, and under which local program, plus who occupies it. If the building is mostly empty while you plan the work, also read vacant building insurance.
Commercial earthquake insurance, answered
Does my commercial property policy cover earthquakes?
Almost never. Earth movement is a standard exclusion; earthquake is bought as a separate policy or a difference-in-conditions policy.
Can the California Earthquake Authority insure my commercial building?
No. The CEA writes residential policies. Commercial buildings use private earthquake markets.
How do earthquake deductibles work?
They're usually a percentage of the insured value, often much higher than a property deductible. I'll show you the options side by side.
What do underwriters rate on?
Location and soil, construction type, age, retrofit work, values and the deductible you choose.
Does the Los Angeles soft-story ordinance apply to commercial buildings?
It can. LADBS sent its last group of soft-story orders, for condos and commercial buildings, on November 6, 2017. The program covers wood-frame buildings of two or more stories, built under pre-1978 code standards, with ground-floor parking or similar open floor space.
Do sellers have to disclose that a property is in a seismic hazard zone?
Yes, in California. Public Resources Code section 2694 requires the seller's agent, or the seller if there is no agent, to tell the buyer when they know the property is in a zone or the state map covering it has been released and noticed locally. Covered sales can use the Natural Hazard Disclosure Statement for this.
Do you offer commercial earthquake insurance outside California?
Yes. Clients across the country send the same quote form. Sam Alishahi is licensed in all 50 states and Washington, DC and places policies there directly. The shopping across carriers works the same way. Rules, minimums and markets differ by state — see insurance requirements by state.
Official sources
- California Earthquake Authority
- LADBS: Soft-Story Retrofit Program
- LADBS: Non-Ductile Concrete Retrofit Program
- San Francisco: Check earthquake safety rules
- USGS: Probability of an earthquake in the Los Angeles and San Francisco Bay areas
- California Geological Survey: Seismic Hazards Program
- California Geological Survey: EQ Zapp
- Cal. Public Resources Code 2694
- Cal. Government Code 8875.2
- Cal. Government Code 8875.6
- Cal. Government Code 8875.8
Send the building details. I'll shop it.
The address, construction and values are enough to start.
Alishahi Insurance · Saman Alishahi, independent insurance broker, California License #4348151. General information, not a quote or a promise of coverage; coverage depends on underwriting and the terms, conditions and exclusions of the policy actually issued. Some policies may be placed with nonadmitted (surplus lines) insurers, which are not members of the California Insurance Guarantee Association (CIGA).
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