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What is Commercial Property Insurance?

Commercial Property Insurance

Commercial Property Insurance Explained

Whether you are a Developer, Property Manager, or Property owner, it is important to protect your investments from the many risks affecting Commercial Properties in Australia.

The foundation of a Commercial Property policy is based on Building Insurance, Rental Income, and Public Liability; however, Commercial Property Insurance has evolved to include a wider scope of coverages, such as:

Machinery Breakdown

Complex coverage for large machinery, plant, and mechanical equipment, with options to include coverage for the resultant business interruption costs.

Rent Default

Protection against the loss of income resulting from tenant eviction, receivership, cease of rental payment, and tenants vacating the property.

Lease Incentives

Coverage for the costs required to attract new tenants to a property following a loss, including cash payment, reduction of rent, and additional fit-out expenses.

Claims Preparation Costs

Covers the cost of professional fees for the preparation, presentation and settlement negotiations for various types of large commercial property claims.

Developments Costs

Allocates additional funds to the development of a property to attract new tenants if a property is damaged or destroyed.

Loss of Attraction – General Area

Coverage for loss of rental income or disruptions in normal business operations if caused by the damage to a property adjacent from the insured property.

Loss of Attraction – Anchor Tenants

Provides coverage for the loss of rental income or disruptions in normal business operations should a key tenant vacate the premises (ex. A large supermarket in a small suburban shopping centre).

Inducements

This covers the expenditure necessary to induce tenants to lease or re-lease a building following reinstatement after a loss (including partial leases).

Fixed Costs Not Recoverable from Tenants

This covers certain after-loss expenses such as cleaning, taxes, pest extermination, building maintenance, and electricity.

Key Areas of Focus in Commercial Property Insurance

To ensure a claim is fully paid by the insurer, it is important that the property is valued at its full replacement cost.

We recommend having a professional insurance replacement cost valuation completed every 3 years to keep the value up to date.

When calculating the annual rental income for a property, one should factor in

1. Indemnity (recovery) Period, consider the following:

– Time to demolish and rebuild.

– Time for Council approvals.

– Time to re-tenant the building

– Minimum of 24 months recommended, your rental income will be covered for the period you select.

2. Outgoings, which includes parking and utilities.

3. Escalation costs over this period.

An Industrial Special Risk policy provides property damage and business interruption cover by any cause not specifically excluded by the policy. This all-encompassing policy is designed for mid to high-value properties, typically from $5,000,000 upwards.

The Business Package offers protection for small to medium size properties against insured perils stated in the policy wording (fire, theft, vandalism, impact damage, water damage, etc ). Typically not as comprehensive as the ISR policy, but can be more price competitive if the property is valued under $8,000,000.

It is the legal responsibility of the person applying for insurance to disclose relevant information to the insurer before a contract is entered into.

The insurer is within their rights to remove themselves from a policy if they become aware of a risk they did not previously know of.

Commercial Property Insurance Team

phil hughes

Account Executive
tyson jeffrey

Account Manager
daniel woodthorpe

Account Manager

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Commercial Property Insurance Testimonials

I’ve been working with the KBI team for four years and their service has been excellent. They take the time to answer all my questions and give me great guidance when renewing my policies and making a claim. I would strongly recommend KBI.

Ryan Budge
Property Owner

Lever Property Group

"Since being introduced to KBI, I have found their professionalism to be second to none in the industry. I strongly recommend KBI as the insurance broker of choice regarding Commercial Property Insurance. They know the Commercial sector inside out and operate on a different level to any other broker I’ve worked with. When it comes to service, they always go above and beyond and ensure my clients are provided with the best available insurance options every year - 10/10."

Toby Bridges
Director

Lansbury & Associates

"Being a Property/Strata Manager in a demanding boutique real estate agency my time management is enormously important. Phil and the KBI team offer a solution to outsource the insurance policies for my clients, providing multiple options which allow the Strata Companies to make an informed decision for the best policies for their property. KBI also assist with the processing of claims, recommend trades and services for those unexpected after hours emergencies and at the renewal of existing policies again send through quotes so my clients are offered the best policies in this very competitive market. Their process saves me time and allows me to focus on my clients in other areas. For quality and friendly customer service KBI is a company highly recommended by myself and the agency in which I am employed."

Lisa Myles-Taylor
Property/Strata Manager

JLL

"I have been working with the Property Team at KBI for some time now and I wouldn’t hesitate to say that they make my job as a property manager easier. They have always managed to improve the cost and/or the cover on all the policies I have sent through. Their level of service is fantastic, especially the claims process and enquiry response time. I’d recommend Phil Hughes and the team at KBI to anybody who works in the commercial property industry if they have any insurance requirements."

Tami Bennett
Property & Strata Manager

Commercial Property Insurers

Contact Info

Street Address:

Level 18, 140 St. Georges Terrace, Perth, WA, 6000

Postal Address:

PO Box Z5102, St. Georges Terrace, Perth WA 6831

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