Commercial Property Insurance
Building, loss of rent and property owners’ liability for owners and landlords of warehouses, shops, offices and industrial property across Australia.
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Insurance for Commercial Property Owners
Commercial property insurance protects the owner of a commercial building against damage to the building, lost rent while it’s repaired, and liability claims from people injured at the property. It’s sometimes called commercial building insurance or commercial landlord insurance.
Whether you own a small building with a single tenant, a large multi-tenanted (or multi-building) property, or anything in between, Coverscope can find a solution that fits. We work with dozens of insurers, including local Australian and Lloyd’s market options.
Why Owners Use a Broker
Premiums for the same building can vary widely between insurers, depending on how each one views your tenants, construction and location. We put your property in front of several insurers, explain the differences, and set the cover up around your leases and your lender’s requirements.
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Commercial Properties We Insure
We arrange cover for private owners, family trusts, companies and super funds that own commercial property, from a single shop or warehouse through to multi-tenanted sites:
- Warehouses, factories and workshops
- Retail shops and shopping strips
- Shopping centres and homemaker centres
- Offices and medical suites
- Industrial and business parks
- Single or multi-tenant buildings
- Freehold property or commercial strata units
- Commercial or mixed residential buildings
- High hazard tenants
- Inferior construction (timber or EPS)
- Partially or fully unoccupied buildings
The tenant’s business, the building’s construction and its location drive both the premium and which insurers will quote, so tell us about all three upfront.
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What Does Commercial Property Insurance Cover?
Property Damage
The main cover. It pays to repair or rebuild the building and structures at the premises after events such as fire, storm, water damage, impact, malicious damage and accidental damage. Your sum insured should reflect the full cost to rebuild, not the market value. Many policies apply an underinsurance clause if your sum insured is below 80% of the property’s value, often waived for small claims or where a current professional valuation is held.
Loss of Rent
If an insured event damages the building and the tenant can’t occupy it, loss of rent cover replaces the rent you lose while it’s repaired, for a set indemnity period, commonly 12, 24 or 36 months. It doesn’t cover a tenant who simply stops paying rent, unless you add rent default cover, which some insurers offer as an option.
Property Owners' Liability
Covers your liability as the owner if someone is injured or their property is damaged because of the building, such as a loose stair, a trip hazard in a common area or a falling sign. Claims are often made against the owner even when the tenant has its own public liability.
Glass
Covers accidental breakage of fixed glass, such as shopfronts, windows and glass doors. For retail and office buildings with large shopfronts, check the glass cover and its excess.
Machinery Breakdown
Covers breakdown of the building’s own plant and equipment, such as air conditioning units, hot water systems and other building plant. Some policies exclude lifts and escalators, so list any you need covered. Standard property damage cover usually excludes internal mechanical or electrical breakdown.
Flood and Natural Perils
Storm and rain water damage is usually covered, but flood is often excluded and can be added as an option. In cyclone, bushfire and flood-prone areas, check exactly which natural perils your policy covers. Some policies also exclude bushfire and named cyclone damage in the first 72 hours of a new policy, so don’t leave cover to the last minute when a storm or fire is approaching.
Extra Costs Commonly Included
A claim usually costs more than the repair itself. Commercial property policies commonly pay these extra costs as well, subject to limits:
- Removal of debris: demolishing, clearing and disposing of damaged parts of the building.
- Professional fees: architects, engineers and council approval costs needed to rebuild.
- Meeting current building rules: the extra cost of rebuilding to comply with council or authority requirements.
- Temporary repairs: making the building safe and secure while permanent repairs are arranged.
- Fire brigade charges: charges for the fire brigade attending a fire at the property.
- Trace and access: finding the source of a leak and reinstating the parts disturbed to find it.
- Capital additions: improvements made during the policy period, up to a limit, until you update your sum insured.
Limits and the exact list vary between insurers, which is one reason we compare policy wordings, not just prices.
Request a Commercial Property Quote
For immediate response please give us a call.
Our team continues to work remotely but you are welcome to arrange an appointment with one of our consultants.
Get a FREE QUOTE
Complete the form to request a FREE QUOTE. Call us at 1300 900 207 for immediate response.
How Much Does Commercial Property Insurance Cost?
Commercial property insurance starts from around $1,550 a year for a single-tenant building, including building, loss of rent and liability cover. Property owners’ liability on its own starts from around $480 a year. Every commercial property is priced individually, and the main factors are:
- The tenant’s business: an office or medical tenant is a lower risk than a restaurant with commercial cooking or a high hazard industrial tenant.
- Construction: timber, EPS panel and older buildings cost more to insure, and fewer insurers will quote them.
- Location: properties in cyclone, flood and bushfire-prone areas, particularly in northern Australia, pay significantly more.
- Sum insured: a higher rebuild value means a higher premium, but underinsuring to save premium can cost far more at claim time.
- Covers and limits: loss of rent, glass, machinery breakdown, flood and the liability limit you choose.
- Claims history and occupancy: previous claims and any vacant areas.
The quickest way to an accurate figure is a quote. We’ll need the property address, building sum insured, annual rent and number of tenants, which is exactly what our quote form asks for.
Commercial Property Insurance Gaps to Check
| Common gap | What can happen | Check with your broker |
|---|---|---|
| Building left vacant | Cover is commonly restricted once a property is unoccupied for 60 to 90 days | The unoccupancy clause, and tell us before a tenant leaves |
| Sum insured too low | An underinsurance clause can reduce every claim in proportion | Your sum insured reflects full rebuild cost |
| Flood not included | Flood damage isn’t covered | Whether flood can be added for your location |
| Tenant changes business | A new, higher-risk use isn’t disclosed | Tell us whenever a tenant or use changes. Some policies require notice of material changes within 28 days |
| Damage caused by tenants | Many policies exclude malicious or deliberate damage by your tenants, other than fire or explosion | How tenant damage is treated, and your bond and lease terms |
| Tenant stops paying rent | Loss of rent only responds to insured damage | Whether optional rent default cover is available, plus your bond or bank guarantee |
| Tenant’s fit-out and stock | Not covered by your building policy | Tenants hold their own contents and liability cover |
| EPS or timber construction | Some insurers decline or restrict cover | Full construction details disclosed upfront |
For more on underinsurance, see our guide to the average clause.
Vacant and Unoccupied Commercial Property
Most commercial property policies restrict cover once a building has been unoccupied for a set period, commonly 60 to 90 days, and some policies exclude almost all damage after that point. Insurers often treat a building as unoccupied unless it has been used for business for at least two consecutive days in the period. If your property is empty between tenants, being renovated or held for sale, tell us before the vacancy period runs out.
We can insure partially and fully unoccupied commercial buildings and keep the cover your lender requires in place. Specialist unoccupied property policies are available, including short-term options of 3, 6 or 12 months, usually for property held in a business name, trust or super fund.
Mixed Use Commercial and Residential Property Insurance
A mixed-use building combines commercial and residential tenancies, such as a shop with a flat above, an office building with apartments, or a shopfront with a separate dwelling at the rear. If you own the whole building on one title, it needs a policy written for both uses. A standard landlord or home policy usually won’t cover the commercial tenancy, and not every commercial policy covers residential tenants.
A mixed-use policy typically covers:
- The whole building: both the commercial and residential parts, under one sum insured.
- Loss of rent: for both the commercial and residential tenancies, if insured damage stops them being occupied.
- Property owners’ liability: for injuries in shared areas, entries and car parks used by customers and residents.
The commercial tenant’s business has the biggest effect on the premium. A restaurant or takeaway under apartments carries a higher fire risk than a professional office or shop, and some insurers won’t quote it. Some business package policies can insure a building that’s part commercial and part residential, but not one that’s purely residential. If the building is strata titled, the owners corporation insures it under a strata policy instead.
Business Package or ISR?
Business Package Policies for Smaller Properties
As a general guide, if your commercial property is valued under $10 million, a business package policy can offer the right level of protection without unnecessary complexity. These policies bundle property damage, liability and loss of rent in one practical, cost-effective policy.
Industrial Special Risks for High-Value Properties
For commercial property or portfolios worth more than $10 million, an industrial special risks (ISR) policy is often the better fit. ISR policies offer broader cover for larger properties and multiple premises, with flexible terms for property damage and business interruption.
Commercial Property Insurance FAQs
Do I need property owners' liability if the tenant already has public liability?
Yes. Claims for injuries sustained at the property are often made against the property owner and may not involve the tenant at all. The tenant’s policy protects the tenant, not you.
Who pays for building insurance on a commercial property?
The owner takes out the building insurance, as the policy protects the owner’s asset. Many commercial leases allow the owner to recover the premium from the tenant as an outgoing, but the policy stays in the owner’s name. Tenants insure their own fit-out, stock and public liability.
Does commercial property insurance cover tenant rent default?
Not as standard. Loss of rent only applies when insured damage stops the tenant occupying the building. Some insurers offer optional rent default cover for when a tenant stops paying or leaves early. It usually has a waiting period and a limit. One major insurer’s version, for example, pays from the fifth week of default, up to 13 weeks’ rent or $30,000. Otherwise, a tenant who stops paying is managed through the bond or bank guarantee.
What about flood cover?
Storm and rain water damage is usually covered, but flood is typically excluded. It can often be added as an option, depending on the property’s location.
Why does the tenant's business affect the premium?
Insurers price the risk of what happens inside the building. A restaurant with commercial cooking or a high hazard industrial use carries a higher fire risk than an office, so it costs more to insure, and some insurers won’t quote it at all.
Can I insure a vacant commercial building?
Yes. Tell us as soon as the building is, or will be, unoccupied, because most policies restrict cover after 60 to 90 days of vacancy. We can arrange cover for partially or fully vacant buildings, including short-term policies.
Can I insure a building with shops and residential units together?
Yes. If you own the whole building, a mixed-use policy can cover the commercial and residential parts, loss of rent for both, and your liability as owner. The commercial tenant’s business has the biggest effect on the premium.
I bought a commercial unit in a strata titled building. Do I need to insure it?
The owners corporation insures the building under a commercial strata policy. As a unit owner, you’ll usually still need cover for your own fit-out, loss of rent and liability inside your unit. Check your strata policy and lease.
I own the building and run my business from it. Do I need two policies?
Not necessarily. If you own the property and also operate a business from it, we can source a policy that combines the building and your business cover, which can save on premiums.
What Commercial Property Insurance Generally Doesn't Cover
Every policy has its own exclusions, but most commercial property policies don’t cover:
- Wear and tear: gradual deterioration, rust, corrosion, mould, rot, and damage from vermin or termites. Insurance isn’t a substitute for maintenance.
- Faulty design or workmanship: the cost of fixing defective building work or design.
- Flood: unless it’s added to the policy.
- Mechanical or electrical breakdown: unless you add machinery breakdown cover.
- Damage caused by tenants: many policies exclude malicious or deliberate damage by tenants, other than fire or explosion.
- Long periods of vacancy: cover is restricted or excluded once the building has been unoccupied beyond the policy’s limit, commonly 60 to 90 days.
- Earth movement: subsidence, landslip and erosion, except where caused within 72 hours by a storm, earthquake or burst water main.
- Your tenant’s property and business: the tenant’s fit-out, stock and public liability for its own operations.
- Intentional damage: damage caused deliberately by you or someone acting with your consent.
Check the exclusions section of any policy before you buy, and ask us to explain anything that affects your property.
Why Property Owners Choose Coverscope
- Access to dozens of insurers, including Australian and Lloyd’s markets, through the Steadfast network
- Experience with hard-to-place risks, including vacant buildings, high hazard tenants and EPS construction
- Cover set up around your leases and your lender’s requirements
- Claims support from lodgement through to settlement
Call 1300 900 207 or request a quote online to see what your cover could look like.
Get in Touch
Simply fill in the form below and we’ll be in touch shortly, or feel free to call and tell us about your specific requirements.
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Suite 10B, Level 10, 2 Corporate Court, Bundall QLD 4217
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PO Box 7005, Mount Crosby QLD 4306
Our team continues to work remotely but you are welcome to arrange an appointment with one of our consultants.
Please complete the form to submit an enquiry.
