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What does commercial property insurance cover?

As a commercial property owner you invest in commercial property knowing that there are many things that can happen that can damage your property or even put your property out of action for a period of time. Whether you own one commercial property or many, covering your property against risk, with appropriate insurance coverage makes good business sense.

Commercial property spans many types of properties from factories and manufacturing plants, to shopping centres and retail premises, to office blocks to medical facilities, to educational facilities or hospitality venues and more. Typically they have a much more complex risk profile than residential properties.

What is Commercial Property Insurance?

Commercial property insurance is a type of insurance policy that provides coverage for commercial property owners to protect against financial losses. These losses may arise from natural disasters, to malicious damage, to unforeseen accidents to issues with tenants.

Commercial Property Insurance is a broad policy that can include several types of cover that is relevant to commercial property owners including:
  • Property Damage
  • Business Interruption
  • Landlord Insurance
  • Public Liability
  • Equipment Breakdown
  • Natural Disasters and more

Let’s take a look at what may be covered by a broad Commercial Property Insurance Policy.

Commercial Property Insurance and Property Damage
Commercial property insurance typically provides coverage for damaged property, whether the damage is to the building or you may have a policy that includes coverage for contents such as equipment, fitout and stock.

Property damage may be caused by events such as malicious damage, theft, fire, lightning, explosions, windstorms, hail, smoke, and more. Property Damage coverage can cover either the cost of repairs or replacement depending on the policy and the nature and extent of the damage.

Commercial Property Insurance and Business Interruption
While property damage policies cover your assets, the impact of damage can extend beyond just replacing assets. A damaged building or fitout may interrupt your ability to rent out a property or conduct business there, otherwise known as Business Interruption.

To address these and other risks that may prevent your business from trading, Business Interruption coverage is an important part of many commercial property insurance policies. Business Interruption provides coverage for lost income and can help pay your bills and other expenses if your business is forced to shut down temporarily due to a covered event.

Commercial Property Insurance and Public Liability
Commercial Property Insurance and Public Liability
Commercial property insurance can also provide coverage for liability claims. Public Liability coverage can protect your business if someone, a customer, supplier or other third party, is injured on your property or if you are found responsible for damage to someone else's property. Public Liability can cover the cost of legal fees, medical expenses, and compensation claims.

Commercial Property Insurance and Equipment Breakdown
Equipment breakdown coverage is another important part of commercial property insurance. It provides coverage for damage or loss caused by equipment breakdowns, such as electrical switchboards, lifts, air conditioning, telephone systems, machinery and server networks.

Equipment breakdown coverage can cover the cost of repairs or replacement and can help your business get back to work quickly.

What is not covered by Commercial Property Insurance?

It is critical to ensure that you work with an experienced insurance broker to ensure your coverage is right for your business. Your insurance broker can help you identify any exclusions from your coverage. Some items that may be excluded include:

  • Tenant Default
  • Wear and tear or neglect
  • Long term vacancy of your property

How to be fully covered for your commercial property?

Commercial property businesses will always face a level of risk, but a good Commercial Property policy will cover you for the most important and business critical risks.

Commercial Property Insurance is not a one size fits all policy, which is why it is so important to work with an insurance broker who is experienced and willing to work to understand your business.

Reach out to us at Grace Insurance to learn more about the coverage options available for your business and how commercial property insurance can protect your assets and your business.

General Advice Warning: This advice is general and does not take into account your objectives, financial situation or needs. You should consider whether the advice is appropriate for you and your personal circumstances. Before you make any decision about whether to acquire a certain product, you should obtain and read the relevant product disclosure statement.

All information above has been provided by the author.

Aimee Henderson, Grace Insurance, ABN 63 133 156 742, AFSL 233750

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