Broker-arranged
Commercial property insurance
Cover for a shop, office, warehouse or industrial unit you own: the building, the rent you lose after an insured event, and liability for the premises. A licensed broker arranges it, whether you occupy the building or lease it out.
- Owner-occupied and leased buildings
- Loss of rent and liability included
- One short form, then a licensed broker takes it from there
What does commercial property insurance cover?
Commercial property insurance covers a non-residential building you own against insured events such as fire, storm and impact, along with the rent you lose while a tenant can’t occupy it and your liability as the owner of the premises. business.gov.au describes building and contents insurance as cover for damage or loss from events including fire, storms or break-ins.
Who insures what depends on the lease. The owner usually insures the building; the tenant usually insures their fit-out, stock and contents, and holds their own public liability.
What’s usually covered, and what isn’t
Every policy differs, so the PDS is the final word.
Usually covered
- The building. Fire, storm, impact and other insured events.
- Loss of rent. While the building can’t be occupied after an insured event.
- Owner’s liability. A visitor injured in a common area, for example.
- Glass and signage. In many policies, or as an option.
Usually not covered
- The tenant’s fit-out and stock. Their contents cover.
- Wear and tear. Maintenance is the owner’s cost.
- Flood, unless the policy includes it. Check the definition.
- Vacant buildings beyond a set period, without telling the insurer.
Getting the sums insured right
Insure the building for what it would cost to rebuild, not its market value. Moneysmart warns about the risk of underinsurance.
Units in a commercial strata
If your shop or office is a lot in a strata scheme, the owners corporation or body corporate insures the building and common property. Your policy then focuses on your fit-out, loss of rent and liability. See strata insurance.
How to get commercial property cover through us
Commercial property insurance questions
Who insures a leased commercial building?
The owner usually insures the building and the tenant insures their fit-out, stock and contents, but the lease decides. Check it before you buy.
Does commercial property insurance cover loss of rent?
Many policies include rent lost while the building can’t be occupied after an insured event, for a set indemnity period.
Should I insure for market value or rebuild cost?
Rebuild cost, including demolition, professional fees and current building codes. Moneysmart warns about underinsurance.
Is flood covered?
It depends on the policy. Check how the PDS defines flood and storm, and whether flood is included or optional.
Why is commercial property arranged by a broker?
Occupancy, construction, location and lease terms all change the risk, so a licensed broker reviews the building and arranges suitable quotes.
Is commercial property insurance compulsory?
No law requires it, but two contracts usually do. A mortgage over the property will require the building to be insured for its full replacement value with the lender noted on the policy, and a commercial lease sets out who insures what, from the structure to the tenant’s fit-out. If the property is a strata lot, the owners corporation insures the building and you insure your contents and liability.
Keep reading
More broker-arranged cover
Sources
Commercial property