Do you own a commercial property in Australia and require insurance advise?
If so, you’re used to managing risk. You know how to budget, plan and prepare for just about every business-related scenario under the sun. However, there might be a few bases you’re forgetting to cover.
How would you cover your losses in the event that your work-related property becomes damaged by fire, wind, theft, vandalism, or a host of other unspeakable events? While no one likes to think about these things, the reality is that no one is immune to them.
This is where commercial property insurance can make a world of difference.
Today, we’re diving into this type of policy to explain all of the different types of cover you can expect. It might be the one investment that makes a world of difference down the road.
Ready to learn more? Let’s get started.
What is Commercial Property Insurance?
Sometimes called small business property insurance, this is a policy designed to protect your business against damage that could occur to your mission-critical equipment. It also protects against the loss of such items, should that occur.
At any time, disaster could strike, and it’s smart to be prepared. Whether you own your work property outright or you lease it through a third-party provider, you’ll need this cover to prevent paying out of pocket if it’s ever compromised.
Why Should I Invest?
There are myriad reasons why Australian business owners should invest in commercial property insurance. Let’s take a look at the top ones.
Cover for Your Business Property and Office Contents
As stated, this policy will ensure that if your property or equipment becomes damaged or lost, you’re not held 100% financially responsible for replacing it.
Especially if you’re a small business owner with already-thin margins, being caught off-guard could have a major impact on your bottom line. That’s why it pays to be prepared.
In addition to general cover, some commercial property insurance companies will also provide specialized plans centred around your specific property. For instance, you might be able to find ones that include cover for:
- Debris removal
- Captial additions to your property or contents
- Costs for fire extinguishment
Peace of Mind
There’s plenty on your plate and mind as you juggle the stressors of property management. You shouldn’t have to worry about losing it all after a freak accident.
Commercial property insurance will give you that valuable reassurance and peace of mind you need to move forward in confidence. Insurance brokers know that the assets you’re covering are essential to your day-to-day business and that any kind of damage could be detrimental.
With a policy in place, you’ll be able to bounce back without incurring a major financial loss. This way, you can stay in business, retain your valuable client partnerships and ensure the wellbeing of your employees, even as you deal with recovering from the setback.
What Do Most Policies Cover?
As you research your options, you’ll find that there are different commercial property insurance rates and types of plans available.
While specific cover options might vary, most policies will protect against certain events that could cause damage or loss to your property or the contents within it.
A few examples of these events include:
- On-premise property loss or damage
- Accidental property damage
- Loss or damage to your contents
- Water-related damage (e.g. busted pipes, leaks, damaged water mains)
- Property loss due to theft, attempted theft, vandalism, assault, burglary or an armed hold-up
- Signage damage (including glass)
- Goods damaged while in transit
- Machinery malfunction (including technology, heavy-duty equipment, boilers, etc.)
- Social setbacks, including civil unrest, riots, or labour disturbances
- Physical impact to your property caused by tree limbs, vehicles, watercraft, or compromised buildings on adjacent properties
In addition, most policies will also extend to cover property loss or damage caused by inclement or extreme weather conditions, which include:
- Wind, water and rain
- Snow, sleet, and hail
What are the Common Exclusions?
It’s important to read all of the definitions included in your commercial property insurance policy. In particular, you’ll need to understand the way that your business personal property insurance plan defines “commercial building” and “contents”.
In most cases, these terms will include all of the tangible property that falls under your possession. It will also cover all of the property that you maintain control over or are responsible for insuring, even if you don’t personally possess it.
While there are exceptions, most policies do not cover certain items deemed non-essential to the ongoing operation of your business. These include, but are not limited to, the following entities:
- Watercraft or aircraft
- Vehicles or trailers licensed for public road transportation
- Architectural structures including bridges and railway tracks
In addition to these physical exclusions, there are also certain events that most commercial property insurance plans won’t cover. These might include:
- Flood (often offered as optional cover)
- Acts of terrorism
- Looting, invasion, war or rebellion
- Intentional damage
- Storm surges
- Sea-initiated damage (e.g. tidal waves) unless the result of a hurricane
- Employee fraud
- Brushfires or cyclones
- Accounting errors
- Operational errors (e.g. faulty workmanship, regulatory non-compliance)
- Damage from insects and rodents (including termite damage)
- Gradual and natural wear and tear
If you have any questions about the items that your policy does and doesn’t cover, you can check your Product Disclosure Statement, or PDS. Exclusions can vary greatly from one policy to the next, so never assume that your policy won’t include certain items.
How Can I Find the Best Policy?
Are you searching for the best commercial property insurance policy to protect your business? If so, one quick online search will reveal myriad options. How can you discern which providers are reputable and which plan is the best?
When comparing policies, be sure to review the following features to make sure you’re signing up for suitable cover that fits your business needs.
Cost of Cover
One of your first considerations will be the actual cost of the cover. How much are your premiums and can you afford to weave them into your budget?
While it might be tempting to buy the cheapest policy out there, remember that in most cases, you get what you pay for. You want to make sure the one you select is perfect for your company and checks all the right boxes, not just price.
Range of Cover
Of course, you’ll want to make sure the commercial property insurance policy you’re eyeing includes the right amount of coverage necessary for your business. Does it cover a wide variety of potential damages and losses, or are the terms narrower? Remember to consider your business type and location as you compare this feature.
Consider the maximum level of cover you can purchase under each policy. Is it enough or does it come up short? You’ll need a policy big enough to put you back on your feet and restore your business to its former financial state when the unexpected happens. You shouldn’t have to settle for coming up short.
All Policy Exclusions
A policy could exclude one specific event, and suddenly, it’s no longer an effective solution for your property. Keeping in mind that all policies will include a long list of exclusions, make sure you understand yours in full before moving forward.
You don’t want to find out after you’ve invested that a business-essential component didn’t make the list.
Any Additional Benefits
There might be an additional cover option that turns a prospective policy into “The One”. These might include any professional fees you incur during a business remodel, computer data recovery, and many others. Be sure to take a close look at your PDS before signing on the dotted line!
Benefit Payment Conditions
Compare what details you’ll need to prove to your insurance agency before you can claim the benefit that you deserve. It’s important to understand if and when you can expect to receive your payout, especially if you encounter an emergency situation.
Policy Cancellation Terms
Can you freely cancel your policy any time you want? Or, are there exorbitant fees and other negatives involved?
Along the same lines, is there a cooling-off period? If so, how long is it? You might decide a few weeks after investing in a policy that it wasn’t the right one for you, and you deserve the right to change your mind.
Find the Commercial Property Insurance You Need
Now that we’ve covered what most policies cover and exclude, as well as what to expect from each plan, are you ready to invest in commercial property insurance for yourself?
If so, we’d love to help.
For more than 20 years, our team of passionate and experienced insurance brokers has helped clients just like you find the cover they need. We’re well-versed in the legalese, paperwork and other duties required to secure the perfect insurance policy.
Contact us today to learn more about what we do and let’s walk this journey together, one step at a time.