Commercial property insurance can feel hard to compare when each policy describes buildings, equipment and stock differently. We help Australian business owners look past the headline wording and focus on what matters to their operations.
Key Takeaways
- Check that the policy schedule lists each business location and the property you want to insure.
- Compare exclusions, limits and optional cover as carefully as the main inclusions.
- Consider whether a Business Insurance Package could bring related business cover together.
- Read the Product Disclosure Statement (PDS) and ask questions about terms that are unclear.
- Policy outcomes can vary with the wording, so check the details that apply to your business.
Hi, I’m Tom Knox, Managing Director & Founder of Business Insurance Specialists. I draw on experience in underwriting, SME and international broking to help us discuss commercial property insurance in practical terms.
What does commercial property insurance cover?
Commercial property insurance generally considers the physical assets your business relies on each day, including buildings, contents and stock. The exact cover available depends on the policy, insurer and your circumstances.
Buildings may include the structure, permanent fixtures, signage, fencing and glass. Contents can include items you own or lease at the premises, such as desks, computers, plant and equipment. Stock may include raw materials, goods in production and finished items ready for sale or distribution.
Policies use their own definitions for covered property and optional extensions, such as debris removal, temporary protection or lock replacement. How and when a policy responds depends on its wording.
Accurate asset replacement values help reduce underinsurance risk. Commercial property policies include an average or co-insurance condition, but the exact rule depends on the policy wording. If the sum insured is materially below the true reinstatement cost at the time of loss, the insurer may reduce the claim proportionally. Allow for construction cost changes, debris removal, professional fees, and council compliance costs when setting sums insured.
How to compare commercial property insurance quotes
When you compare commercial property insurance quotes, it helps to look beyond the headline details. Reading the schedule and policy wording across the following areas can make the differences between policies easier to understand.
Covered events and inclusions
Policies can differ in the events they cover and the terms that apply to property damage. Check the PDS and policy wording to confirm what is included, because how and when a policy responds depends on its wording.
Policy terms and settlement conditions
Look at how each policy addresses property damage or loss. Different policies set out different conditions for damaged assets, so it is worth asking about any wording that is unclear.
Excesses and limits
Compare the excesses and limits that apply to different property sections. You may also want to ask how the policy treats matters such as:
- Site clean-up and debris removal
- Temporary storage for undamaged stock
- Restoring business documents and digital records
- Professional advice from engineers or surveyors
Location and severe weather
Policies can treat severe weather events differently. Flood, Cyclone or Bushfire-related damage may require specific inclusion depending on your location and the insurer’s guidelines, so check the defined terms in the PDS.
Contracts and risk reviews
Requirements vary by industry, licence and contract, and we can help you check what applies to your business. An Insurance Contract Review can help you consider whether policy coverage meets the requirements of your lease or contractual agreement.
How property damage can disrupt your business
Property damage can interrupt day-to-day operations. If an unexpected event affects your premises or essential equipment, your business may still have commitments to manage while trading is disrupted.
Business Interruption coverage requires a triggering event under the material damage section of the policy. Once a property damage claim is accepted, Business Interruption cover assists by replacing lost gross profit and maintaining fixed ongoing operational expenses while trading is restored.
Property risks can depend on the building’s construction, age, security measures and location. Thinking through how you would continue operating after a disruption can help you identify the details worth discussing with us.
BIS is a Brisbane-based commercial insurance brokerage. We work on your behalf, explain policy terms in plain English and support you at claim time.
Before renewal or a new lease, gather your asset schedules and note any recent property changes. This gives us a clearer picture of your business when we discuss your commercial property insurance needs.
Getting support with commercial property insurance
A useful comparison starts with a clear picture of your premises, equipment, stock and day-to-day operations. Reviewing the detail in each policy can help you understand how the available cover may relate to your business.
Requirements vary by industry, licence and contract, and our team can help you check your situation. At BIS, we take time to understand your operations, review property documents and explain policy terms in plain English for businesses in Queensland and across Australia.
When you are ready, explore our Insurance Policies, Request an Insurance Quote or Contact the BIS Team to talk through your property cover.
The information in this article is general in nature and does not take into account your objectives, financial situation or needs. Before making a decision about insurance, consider whether the information is appropriate for you and read the relevant Product Disclosure Statement (PDS) and Target Market Determination (TMD).
Frequently Asked Questions About Commercial Property Insurance
What does commercial property insurance cover for Australian businesses?
Commercial property insurance may cover buildings, fit-outs, stock and office equipment against physical loss or damage from events such as fire, storms or vandalism. The available cover, extensions and exclusions depend on the policy wording, insurer and your business circumstances, so review the PDS carefully.
How do insurers assess commercial property insurance?
Insurers consider the individual business, the cover selected and the risks involved. Factors may include the location and construction of the premises, building age, security arrangements, fire protection and claims history.
What should business owners consider about claim settlement terms?
Claim settlement terms describe how an insurer may respond when property suffers loss or damage. How and when a policy responds depends on its wording and the circumstances of the loss, so we recommend reviewing the policy wording and PDS with us.
Are severe weather events automatically included in standard policies?
Events such as flood are not automatically included in every commercial property policy. With certain insurers, especially overseas underwriters, we note stricter definitions for Storm, and in some situations Bushfire and Cyclone cover is limited or excluded. An insurer may apply exclusions or specific terms based on the location of your premises, and how a policy responds depends on its wording.
How does building vacancy affect commercial property insurance?
Leaving a commercial building unoccupied or vacant for an extended period can change the property risk and may affect cover under some policy terms. How and when a policy responds depends on its wording, so speak with us about any change in occupancy.
