Commercial Property Owners are a unique type of business whose activities are that of owning a building occupied by any number of businesses.

Whether you own an industrial building with a single tenant or a multi-tenanted commercial precinct, the financial implications of suffering damage from any number of causes are severe. Property owners contend with fires, floods, storm damage, and are also exposed to liability claims from their tenants or members of the public who have suffered harm.

The unique relationship between building owner and tenant means that both parties need to adequately insure their own financial interests, comply with the relevant lease agreement, and maintain adequate liability coverage to ensure a comprehensive insurance program.

Your financial institution or lender will also ensure that you have an insurance policy in place to adequately cover the full insurable replacement value of the building in case of a major loss or damage.

Insurance for commercial buildings is designed to cover many causes of physical damage, including:

• Fires & explosions
• Storm damage, lightning & fallen trees
• Flooding (optional cover that has special meaning in commercial insurance and is not automatically covered, read more below)
• Burst water pipes & water leaks
• Accidental damage
• Malicious damage
• Theft & vandalism
• Earthquakes or subsidence

In addition to this, it is also designed to protect the financial position of its owner against other losses, including:

• Lost rental income following an insured event (e.g. a fire) where the building cannot be let until it is repaired or rebuilt
• Liability against any damage to persons or property (e.g. building defects & inadequate maintenance)

Policies can also be tailored to include other covers that business packages can cover, such as Equipment Breakdown & Tax Audit cover.

Insuring your building for the correct value is paramount to maintaining adequate coverage in the event of a claim. This process is often estimated, rushed, or not given the attention it requires.

Buildings that are insured for less than they are valued can suffer from “underinsurance” in the event of a claim. In short, this means an insurer reduces their claim payout because a building has not been insured adequately and accurately, and can be extremely damaging.

Insurable replacement values of buildings do not mirror estimated rebuild costs or market sale values, since there are many costs involved above and beyond materials and labour if a building were to be significantly damaged or levelled.

We always recommend that property owners invest in professional valuations of their properties. However, we also have advanced tools at our disposal to aid you in calculating the insurable replacement value of your building, using details of its size, construction & location.

For property owners, protecting against lost rent is a type of Business Interruption. Serious weather events, all manner of fires, and many other scenarios have the potential to prevent your building from being lettable and absolve your tenant of the responsibility of paying rent.

Receiving an insurance payout to repair, replace, or rebuild after suffering damage is only part of the solution, as this process can take months or years. During this time, it’s essential to ensure continuity so that you can focus on rebuilding while having peace of mind that your rental income is retained.

Business interruption cover is designed to make up the shortfall after suffering an interruption after an insured event, and keep you in the financial position you’d be in had that event not occurred. There are also sub-features in place that can get you back up and running in an emergency and avoid a serious interruption altogether.

Flood cover is a common oversight for many building owners, as it is often confused with storm damage and heavy rainfall.

In most cases, standard cover under commercial wordings does not extend to widespread flooding events resulting from overflowing water sources like dams & rivers.

Our team is experienced in assessing your risk of flooding depending on your location, and reviewing available flood maps so that you can make an informed decision.