Is Your Commercial Property Covered Properly? *

As an owner of a commercial property, you would prefer not to have to claim on your insurance policy. However, if you do need to lodge a claim, you want your commercial property policy to respond and offer cover.

When doing a review of commercial property owners’ coverage, it is frightening how often our team of insurance brokers find there is information on property owners previous policy that is out-dated or hasn’t been disclosed correctly.

As information that is out-dated or hasn’t been disclosed correctly may lead to serious complications when lodging a claim, we’ve compiled a checklist of key considerations to help you ensure your commercial property is covered correctly:

Tenants and Their Activities*

Are the tenants listed on your policy the most current? Have you provided accurate details about their activities? This information is particularly relevant for higher-risk tenants, such as restaurants or manufacturing businesses, as it may influence your coverage and premiums.

Hazardous Goods Storage*

Does your tenant operate a cleaning, industrial, or manufacturing business? If so, it’s crucial to disclose the storage of any flammable or hazardous materials. This ensures your insurer understands the risks associated with your property before they offer cover.

Residential Tenants in Mixed-Use Properties*

If your commercial property includes a mix of commercial and residential tenants, it’s important to disclose all tenants’ detail. Not all insurers cover mixed-use properties, so failing to inform them may leave you exposed.

Building Construction Details*

Have you disclosed the correct details about your building? This includes its age, construction materials, fire protection systems, and security measures. After talking to a property owner who made an enquiry with us, we found out they hadn’t disclosed the heritage listing on the previous policy, which could be detrimental at claim time.

Building Replacement Value*

Building costs have risen significantly in recent years. Ensure your building’s sum insured reflects today’s rebuilding costs, including labour and materials. Underestimating this value may leave you responsible for a portion of the rebuilding expenses in the event of a major claim. You don’t want this to happen to you!

Machinery Breakdown Insurance*

If you are responsible for equipment such as air conditioning units or elevators, consider adding machinery breakdown cover to your policy. This type of insurance may help with repair or replacement costs in case of mechanical failure.

Business Interruption Indemnity Period*

In Australia, rebuilding a property after a major event, such as a fire, often takes longer than anticipated. Many policies include a business interruption indemnity period of 6 or 12 months, but this may be insufficient. Ensure your policy reflects a realistic timeline to rebuild and restore rental income. Consider 18- or 24-months Business Interruption Indemnity Period* 

Need Guidance? *

If you’re seeking guidance and ongoing support with your commercial property insurance, Smart Business Insurance brokers may be able to assist. Reach out today to see if we can help you.

Disclaimer: The content of this blog article is intended for general informational purposes only and should not be considered as professional advice. While we strive to ensure accuracy, we make no guarantees about the completeness or reliability of the information. For guidance regarding what and how much business insurance cover you need, we recommend consulting with a business insurance broker. Any actions you take based on any information provided here are at your own discretion.