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Commercial property insurance is just like home insurance but for non-residential buildings. It can help in lots of costly scenarios, such as flood, fire and vandalism.
The best bit? Commercial property insurance can be tailored to suit your exact needs. So no matter what your business property looks like, there's appropriate cover available.
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Speak to a broker: An expert broker will get back to you with advice
We think so. While we don't want to tell you what to do, commercial property insurance and business insurance are both pretty complicated areas.
Brokers are trained to make these things easier to understand, so you know exactly what you're paying for and don't end up disappointed further down the line.
Commercial property insurance, sometimes called commercial building insurance, protects the building that a business operates from. It covers the main structure of the building. That's the roof, walls, ceilings etc.
In some cases, commercial property insurance will also protect the things inside of a business, such as fixtures and fittings, machinery and equipment or stock. This is most useful for people who run a business from a property they own.
Typically, commercial property insurance comes as part of a complete business insurance package. That way, you get cover for more risks, such as legal liability, cyber crime and business interruption.
However, if you're a landlord and you lease your commercial property out to another business, you may benefit from landlord insurance or standalone commercial property insurance.
Commercial property insurance covers the building from which a business operates. In some cases, it also covers the contents of the building.
Here are some examples of what commercial property insurance might cover:
Commercial property insurance will help in lots of different situations. Some common examples include:
The definition of buildings and contents includes all tangible property that belongs to you, or for which you are legally responsible, or for which you have assumed the responsibility to insure. However, the definition generally excludes things like stock, money, jewellery, works of art, watercraft, aircraft, vehicles or trailers registered or licensed to travel on a public road, livestock and features like bridges and railway tracks. Check the PDS of each policy closely to make sure you know exactly what items are included in your policy.
There are a number of common mistakes to avoid when purchasing commercial property insurance:
When determining how much cover you need, remember the aim of commercial property insurance is to return your property to the same financial position it was in before the insured event took place. In order to assign a coverage amount to a property, there are two ways to determine the value of that property: actual cash value and replacement cost.
The actual cash value is the present-day value of a property. That figure is arrived at by calculating how much it would cost to replace a property, then deducting for depreciation caused by wear and tear.
The replacement cost method calculates the replacement cost of the property as new, rather than at its depreciated value. This figure can be very different to a property’s real-world market value. Location is a particularly important consideration in this method.
Many brokers recommend using the replacement cost method to calculate how much cover you need, but speak to an expert to get tailored advice for your situation.
Below are the features of business insurance policies you should compare to help find suitable cover:
Looking for a commercial property loan?
Commercial property insurance won't cover anything that isn't a physical risk. That includes business interruption, cyber crime and legal liability.
Thankfully, you can combine commercial property insurance with other types of cover, to create reliable and effective business insurance. You can request quotes for business insurance via Finder or speak to one of our broker partners for more help.
However, even with the most comprehensive of business insurance policies have exclusions. Some common ones are:
Learn more about the different types of business insurance available in Australia
Consider all of these questions when shopping for commercial property insurance and speak to an expert to get tailored advice and the right cover for your business.
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