Sample Commercial Insurance Policy Analysis

A Business Owner's Policy issued to a software consulting and data-hosting business where the core professional and technology services appear excluded, a separate endorsement removes professional and tech claims, flood is excluded even though the location is in a FEMA Special Flood Hazard Area, and the cyber sublimit is only $25,000.

Reviewed by the BizLeaseCheck Editorial Team · Last updated May 26, 2026 · Informational analysis, not legal advice.

95Danger score

Critical risk indicators — Commercial insurance

This is the same report shape every BizLeaseCheck analysis produces: a 0–100 danger score, prioritized red flags with verbatim evidence quotes, the key dates buried in the document, and a tailored negotiation email draft.

8 red flags

8 key dates

Evidence-backed

Email draft included

Want the deep explainer behind a commercial insurance? Read the commercial insurance guide cluster.

See commercial insurance guides

Executive Summary

Document: Insurance policy

This document appears to be a Business Owner's Policy with claims-made CGL and commercial property coverage, but it contains several severe limitations that materially reduce protection for this insured's actual operations as a software consulting and data-hosting business. The liability section appears to be claims-made with no prior-acts coverage, only a 60-day tail, defense costs inside the limit, and a $25,000 self-insured retention that must be exhausted before the insurer has any duty to defend. The stated $500,000 aggregate is shared across all coverage parts, which appears unusually restrictive. The property section appears to be named-peril only, ACV rather than replacement cost, subject to 90% coinsurance, and excludes flood at a location specifically identified in a FEMA Special Flood Hazard Area. The policy also expressly excludes professional services and technology services, which appears to remove core liability exposure for this insured's consulting and data-hosting operations. Cyber coverage is capped at only $25,000 and broader cyber events are excluded. Additional insured and waiver-of-subrogation protections are absent. Overall, this policy appears to leave major uninsured gaps for professional liability, technology E&O, meaningful cyber loss, flood, ordinance-or-law, and potentially defense-cost burn through. The insured should review the full forms and endorsements with a licensed insurance agent or broker promptly.

95Danger score

Coverage Terms Overview- Business Owner's Policy (BOP) with Commercial General Liability (claims-made) and Commercial Property

Carrier

Summit Mutual Insurance Company

Valuation basis (RCV / ACV)

Actual cash value (ACV), not replacement cost.

Annual premium

$9,800

Policy type

Business Owner's Policy (BOP) with Commercial General Liability (claims-made) and Commercial Property

Coverage limits

CGL: $500,000 each occurrence; $500,000 general aggregate shared across all coverage parts; defense costs included within limits. Property: $400,000 building and business personal property.

Sublimits

Cyber / data breach $25,000; water / sewer backup $10,000; equipment breakdown $50,000; business income 30 days maximum.

Deductibles / SIR

$25,000 self-insured retention per liability claim, exhausted before insurer duty to defend; $5,000 property deductible per occurrence.

Covered perils

Property appears to be named-peril (Basic) form only, not special form; insured bears burden to prove covered cause of loss.

Key exclusions

Professional services / consulting / software / data services; cyber events and unauthorized access beyond $25,000 sublimit; communicable disease / virus; pollution; flood; earth movement; mold; wear and tear; ordinance-or-law upgrade costs.

Claims basis (claims-made vs occurrence)

CGL appears claims-made with retroactive date of 2026-01-01, no prior-acts coverage, and only 60-day ERP unless endorsement purchased.

Coinsurance

90% coinsurance applies to property.

Additional insureds / waiver of subrogation

No blanket additional-insured endorsement included; additional insureds are not added.

Cancellation & nonrenewal

Midterm cancellation on 10 days written notice for any reason permitted by law; nonrenewal on 30 days written notice.

Duties after loss

Notice as soon as practicable; signed, sworn proof of loss within 60 days or claim may be denied; insurer may examine insured under oath.

Endorsements

Exclusionary endorsement removes coverage for claims arising out of professional or technology services; no blanket additional-insured endorsement; no waiver-of-subrogation endorsement.

Coverage gaps

Material apparent gaps include technology E&O / professional liability, meaningful cyber coverage, flood coverage despite SFHA location, ordinance-or-law, broader business income protection, replacement cost valuation, blanket additional insured, waiver of subrogation, and prior-acts / adequate ERP protection.

Critical Dates & Deadlines

Don't miss these dates. Add them to your calendar immediately.

Policy Effective Date

2026-01-01|Policy period begins.

Policy Expiration Date

2027-01-01|Policy period ends.

Claims-Made Retroactive Date

2026-01-01|Retroactive date appears to be policy inception, with no prior-acts coverage.

Extended Reporting Period (Tail)

Date not specified|Only 60 days of tail coverage is stated unless an endorsement is purchased.

Proof of Loss Deadline

Date not specified|A signed, sworn proof of loss must be submitted within 60 days of the loss or the claim may be denied.

Claim / Occurrence Notice Deadline

Date not specified|Notice of any claim or occurrence must be given as soon as practicable.

Midterm Cancellation Notice

Date not specified|Insurer may cancel midterm on 10 days written notice for any reason permitted by law.

Nonrenewal Notice

Date not specified|Insurer may elect not to renew on 30 days written notice.

Detected Red Flags

Download Redlines (DOCX) View Source PDF

CriticalIssue Score: 100/100

Core professional and technology services appear excluded

EXCLUSIONS / ENDORSEMENTS

Why it's dangerous

This insured is identified as a software consulting and data-hosting business. This policy appears to exclude liability arising from the very services the business sells. A client claim for bad advice, coding error, implementation failure, hosting outage, or data-handling mistake may fall outside coverage entirely, leaving the business to fund defense and settlement itself.

“Professional services (any error or omission in the rendering of consulting, software, or data services) is EXCLUDED.”(View in PDF)

Negotiation Tactic

Frame this as a mismatch between underwriting description and exclusion wording: the declarations describe a software consulting and data-hosting business, so the insured needs coverage aligned to that exposure.

Suggested Redline

Delete or narrow the professional/technology services exclusion so it does not apply to the Named Insured's software consulting, implementation, hosting, managed services, or data-processing operations; alternatively add a Technology Errors & Omissions coverage endorsement covering such services.

CriticalIssue Score: 99/100

Exclusionary endorsement removes claims from professional or technology services

ENDORSEMENTS

Why it's dangerous

Even if the base form were arguable, this endorsement appears to broadly remove coverage for claims arising out of professional or technology services. 'Arising out of' wording is often broad and may sweep in mixed allegations, including bodily injury or property damage tied to technology operations.

“An exclusionary endorsement removes any coverage for claims arising out of the insured's professional or technology services.”(View in PDF)

Negotiation Tactic

Ask the broker to map common claim scenarios against this endorsement in writing, including hosting outage, coding error, client data corruption, and contractually assumed defense obligations.

Suggested Redline

This endorsement shall not apply to claims alleging bodily injury, property damage, personal and advertising injury, or contractual liability arising from the Named Insured's technology operations, except to the extent such claim is solely for professional negligence covered elsewhere.

CriticalIssue Score: 99/100

Flood is excluded at a FEMA Special Flood Hazard Area location

DECLARATIONS / EXCLUSIONS

Why it's dangerous

The location is expressly identified in a Special Flood Hazard Area, yet flood is excluded. A flood event could damage property, interrupt operations, and leave the insured with little or no recovery under this policy.

“Location: 100 Riverside Drive (ground floor, designated FEMA Special Flood Hazard Area)”(View in PDF)

Negotiation Tactic

Use the declarations' flood-zone designation as direct evidence that flood is a known, location-specific exposure requiring separate placement.

Suggested Redline

Add flood coverage for the insured location, including building, business personal property, and business income/extra expense, or schedule separate flood insurance with coordinated limits and waiting period disclosures.

CriticalIssue Score: 98/100

Cyber coverage is only $25,000 and broader cyber events are excluded

SUBLIMITS / EXCLUSIONS

Why it's dangerous

For a data-hosting business, $25,000 appears far below likely costs of forensic response, notification, legal review, restoration, extortion response, business interruption, and third-party claims. The policy also appears to exclude cyber events beyond that amount, so a meaningful cyber incident may be largely uninsured.

“Cyber / data breach: $25,000”(View in PDF)

Negotiation Tactic

Use the insured's business description to show cyber is not incidental exposure but a core operational risk.

Suggested Redline

Replace the $25,000 cyber/data breach sublimit with separate cyber coverage providing first-party and third-party limits, and delete language excluding cyber events, data breach, and unauthorized access beyond the sublimit.

CriticalIssue Score: 97/100

Cyber exclusion beyond sublimit may bar major data and network claims

EXCLUSIONS

Why it's dangerous

This wording appears to cap and then exclude the very loss category most likely to affect this insured. Once costs exceed $25,000, the remainder may be uninsured. That can include customer claims, regulatory response, breach counsel, and restoration costs.

“Cyber events, data breach, and unauthorized access beyond the $25,000 sublimit are EXCLUDED.”(View in PDF)

Negotiation Tactic

Ask for specimen cyber wording and a side-by-side gap analysis between this BOP and any cyber policy.

Suggested Redline

The exclusion for cyber events, data breach, and unauthorized access shall not apply where coverage is provided under a separate cyber endorsement or policy, and mixed claims shall be allocated to preserve non-cyber coverage under this policy.

CriticalIssue Score: 96/100

$25,000 SIR must be exhausted before insurer has any duty to defend

COVERAGE A — COMMERCIAL GENERAL LIABILITY (CLAIMS-MADE)

Why it's dangerous

This appears to delay the insurer's defense obligation until the insured pays the first $25,000 per claim. That creates immediate cash-flow pressure and can complicate early claim handling, especially if multiple claims arise.

“Self-Insured Retention: $25,000 per claim, which must be exhausted by the insured before the insurer has any duty to defend.”(View in PDF)

Negotiation Tactic

Ask for written confirmation whether panel counsel can be appointed before SIR exhaustion and whether defense invoices count toward the retention.

Suggested Redline

The insurer shall have the duty to defend any covered claim from first notice, and the Self-Insured Retention shall operate as a reimbursement obligation or deductible rather than a condition precedent to defense.

CriticalIssue Score: 95/100

Defense costs erode the liability limit

COVERAGE A — COMMERCIAL GENERAL LIABILITY (CLAIMS-MADE)

Why it's dangerous

This appears to be a wasting policy. Legal fees can consume the $500,000 limit quickly, leaving little or nothing for settlement or judgment. For technology and data disputes, defense costs alone can be substantial.

“DEFENSE COSTS ARE INCLUDED WITHIN THE LIMIT OF INSURANCE and reduce the amount available to pay any claim.”(View in PDF)

Negotiation Tactic

Ask the broker to illustrate how much indemnity remains after a typical defended claim with $150,000 to $300,000 in legal spend.

Suggested Redline

Defense costs shall be paid in addition to, and shall not reduce, the applicable limit of insurance; if unavailable, increase the applicable liability limit and provide excess follow-form coverage.

CriticalIssue Score: 95/100

Flood and earth movement are excluded

EXCLUSIONS

Why it's dangerous

This exclusion removes major catastrophe perils. Given the stated flood-zone location, flood is the more immediate concern. If water enters from flood rather than sewer backup, the $10,000 backup sublimit may not help.

“Flood and earth movement are EXCLUDED.”(View in PDF)

Negotiation Tactic

Ask the broker to explain how storm surge, surface water, and sewer backup are treated when multiple water causes contribute to loss.

Suggested Redline

Provide flood coverage by endorsement or confirm placement of separate flood insurance; clarify anti-concurrent causation treatment for flood versus sewer backup and other water causes.

Negotiation Email Draft

Subject: Coverage questions and requested changes for BOP renewal / revision Hello, I reviewed the current Summit Mutual Business Owner's Policy for Example Data Services LLC and would like your help confirming several coverage issues and obtaining options to address them. Based on the policy wording, this policy appears to leave major gaps for our actual operations as a software consulting and data-hosting business. Please review the points below and let me know what can be changed by endorsement or placed separately. 1) Professional / technology services exclusion - The policy appears to exclude professional services, consulting, software, data services, and claims arising out of professional or technology services. - Since those are our core operations, please confirm in writing what claims would actually be covered under the liability section. - Please quote options for Technology E&O / professional liability coverage, including prior-acts coverage. 2) Cyber coverage - The policy shows only a $25,000 cyber / data breach sublimit, and broader cyber events appear excluded beyond that amount. - Please quote standalone cyber coverage with first-party and third-party protection, including incident response, privacy liability, network security liability, ransomware/extortion, digital asset restoration, and business interruption. 3) Claims-made structure / prior acts / tail - The liability coverage appears claims-made with a retroactive date of January 1, 2026 and no prior-acts coverage. - The extended reporting period appears to be only 60 days. - Please confirm whether prior acts can be added or backdated, and quote a longer ERP/tail option. 4) Defense within limits and low aggregate - Defense costs appear to reduce the liability limit. - The general aggregate appears to be only $500,000 and shared across all coverage parts. - Please confirm exactly how the shared aggregate works and whether defense costs erode that aggregate. - Please quote higher limits and any excess / umbrella options. 5) Self-insured retention - The policy states a $25,000 SIR per claim that must be exhausted before the insurer has any duty to defend. - Please confirm whether defense costs count toward the SIR and whether counsel can be appointed before full exhaustion. - If possible, please quote an option with first-dollar defense and a deductible instead of an SIR. 6) Property form concerns - Property appears to be ACV, subject to 90% coinsurance, and written on named-peril basic form only. - Please quote options for replacement cost valuation, agreed value or removal of coinsurance, and special form causes of loss. 7) Flood exposure - The insured location is identified as being in a FEMA Special Flood Hazard Area, but flood is excluded. - Please quote flood coverage options, including business personal property and business income / extra expense. - Please also explain any waiting periods and whether private flood or NFIP is the better fit for this location. 8) Sublimits - Water / sewer backup is only $10,000. - Equipment breakdown is only $50,000. - Business income is limited to 30 days maximum. - Please quote higher limits or broader options for each of these. 9) Ordinance or law / code upgrades - The policy appears to exclude ordinance-or-law upgrade costs. - Please quote ordinance or law coverage for demolition, increased cost of construction, and loss to undamaged portions. 10) Contract compliance items - The policy states there is no blanket additional-insured endorsement and no waiver-of-subrogation endorsement. - Please review our lease and client contract requirements and quote blanket additional insured and blanket waiver of subrogation endorsements where available. 11) Cancellation / nonrenewal / reporting conditions - The policy appears to allow midterm cancellation on 10 days' notice and nonrenewal on 30 days' notice. - Proof of loss appears due within 60 days or the claim may be denied. - Please confirm whether state-specific rules provide longer notice periods or more favorable conditions than shown here. Please respond with: - A coverage gap summary based on our operations - Quotes or options to address the items above - Copies of the actual forms and endorsements that control these issues - Your recommendation on how to coordinate BOP, Technology E&O, Cyber, Flood, and any Excess/Umbrella coverage so there are no gaps Thank you, Policyholder Example Data Services LLC Rider AI Analysis

More sample reports

Every BizLeaseCheck document type produces a report like this. Browse other examples:

Commercial leaseCommercial LeaseA retail triple-net (NNN) lease with an uncapped operating-expense pass-through, a landlord relocation right, and an unlimited personal guaranty.View sample Residential leaseResidential LeaseAn apartment lease with a three-month security deposit, compounding late fees, an auto-renewal trap, a waiver of the warranty of habitability, and a self-help lockout clause.View sample Personal guarantyPersonal GuarantyA continuing, unlimited personal guaranty with joint-and-several liability, a waiver of defenses, and no burn-off — the clauses that put the signer’s personal assets on the line.View sample Business funding / MCABusiness Funding / MCAA merchant cash advance with a high factor rate (and the estimated true APR it hides), a confession of judgment, fixed daily ACH debits, and a hard-to-use reconciliation provision.View sample SBA loanSBA Loan PackageAn SBA 7(a) loan with an uncapped unconditional personal guaranty, joint-and-several liability for every 20%+ owner, available home-equity collateral, and lender authority to pursue guarantors before liquidating business collateral.View sample Franchise FDDFranchise Disclosure (FDD)A franchise disclosure document with a heavy fee stack (royalty + brand fund + tech + supplier rebates), broad no-cure termination triggers, a Gross Sales definition that includes amounts you may never collect from delivery platforms, and reserved encroachment rights (online, delivery, kiosk, wholesale) inside your market.View sample Vendor / SaaS MSAMSA / SaaS ContractA vendor-favorable SaaS MSA where the Customer carries multiple effectively uncapped liability buckets while the Vendor caps its own exposure at 12 months of fees, with a broad Customer indemnity, no termination for convenience, and acceleration of all remaining fees on early termination.View sample CRE purchaseCRE Purchase AgreementA commercial real-estate purchase agreement where $125,000 of earnest money goes hard immediately on deposit, the inspection period is only 10 days, the sale is broadly AS-IS with a disclaimer of all reps, and Buyer is asked to release Seller from all environmental, latent-defect, and unknown claims.View sample Business purchaseBusiness / Asset PurchaseAn asset purchase agreement that quietly assumes nearly all pre-closing liabilities (including unknown ones) to the Buyer, makes the contractual indemnity the sole and exclusive remedy in a way that purports to bar fraud claims, and provides no escrow, holdback, or indemnity security from the Seller.View sample Equipment financeEquipment Finance AgreementA non-cancelable equipment finance agreement structured economically like a financed purchase but drafted with lease-style remedies: explicit hell-or-high-water payment even if equipment never works, acceleration of all remaining payments plus residual on default, and evergreen 12-month auto-renewals at full payment if notice is missed.View sample Employment / NDAExecutive Employment AgreementAn executive employment agreement with a 24-month nationwide non-compete covering any connection with any competing business, a confidentiality clause that purports to bar disclosure to government agencies, and an IP-assignment provision that captures personal-time inventions with no carve-out.View sample LLC / operating agreementLLC Operating AgreementAn LLC operating agreement that concentrates control in the Manager — mandatory capital calls with only 10 business days to fund, 2x dilution plus voting suspension plus a 15% priority loan as the default penalty, and a departure valuation that uses book value with stacked 25% minority and 25% marketability discounts.View sample Construction contractConstruction SubcontractA subcontract that shifts major payment and schedule risk downstream: an explicit pay-if-paid clause, a Contractor disclaimer of any duty to pay amounts the Owner does not pay (for any reason), an unconditional lien waiver through the application date that includes unpaid amounts and retainage, and broad one-sided indemnity.View sample Assumed leaseAssumed Lease (DD)A commercial retail lease being assigned to an incoming restaurant tenant: under 12 months remaining on the term, no transferable renewal option, an existing monetary default that the assignee would inherit, uncapped NNN/CAM exposure, and a landlord recapture right that can terminate the lease instead of consenting to the assignment.View sample