We had excellent service in obtaining insurance on a newly purchased commercial property. Clayton Rowlings explained everything so clearly and very patient with many questions regarding different options. Highly recommended! Thanks Clayton.
Insurance for your building and the business you run in it
Quick answerWhat insurance do I need if I own the building and run the business in it?Consider covering the building, your contents and stock, the income a serious loss could stop, and your liability as both property owner and business operator. Consolidated Insurance Brokers arranges cover in the right names, on separate policies or one agreed by the insurer. We explain the options and price so you can choose.
A serious loss can damage your premises and interrupt your income. We help you arrange cover for both, in the right names with the costs and choices explained.
Check your underinsurance risk in two minutes Every commercial building we insure gets a desktop building replacement estimate commissioned at no cost to you, every year.
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Tracey helped me sort out professional indemnity and public liability insurance for my new business - she was super helpful throughout the process helping me navigate for the first time.
Deja provided a prompt and professional service in securing a policy that suited my requirements.
Terrific experience with Gina. I had a difficult policy which other brokers couldn't find a solution for. Gina had an option for me within a few hours. I would highly recommend.
Thank you so much Cyndie for your help/advice/service. You made the whole process so easy. Thank you again. Jason Armstrong
Alison was a life-saver for us, staying after hours to make sure that we could get the building insurance coverage we urgently needed for a property purchase.
Debbie was always happy to help with my questions and very prompt with her service.
Hi I can highly recommend Aimee Spencer for all your insurance needs she has done a fantastic effort on keeping my insurance policy once again Many Thanks for all your work
Saskia Van Oostveen was efficient, professional, accurate, helpful and friendly throughout the entire process. Highly recommend!
A great experience with Tori, attaining some tricky commercial insurance, she was very professional in catering to your needs, whilst also having a quick turn around.
Jade was wonderful, finding me insurance coverage for a commercial property. Greatly appreciated her excellent service.
I contacted Tracey E from Consolidated Insurance Brokers for some commercial property quotes. Tracey was super helpful helpful, friendly and provided great advice. Highly recommend for all your insurance needs!
Thanks for your assistance Dylan with car insurance inquiry you have been really helpful and professional.
Shona was always available and answered all my queriers. A1 service and happy to recommend.
I contacted Renay after she was recommended by a family friend, for home and contents insurance. She was prompt and helpful and had me all sorted in a couple of days. Highly recommend!
I needed fast transit insurance this week and Daniel Roussounis was outstanding in his immediate response and getting this organized for me. Can't recommend Daniel and Consolidated Insurance Brokers highly enough!
Second year organising insurance with Jim K., did not have any issues and a smooth transition. I recommend
May Lewong at the Emerald office was amazing. Easy to deal with and was quick and efficient.
Reena was absolutely fantastic during the entire process helping me set you our new home and contents insurance. Would definitely recommend to anyone.
Natasha as always, gives us professional, exceptional service and would recommend her to any business :-)
Read every review, word for word as it was written on Google
Not quite your situation? If you lease your premises instead, see Business owner tenants.
What happens when an owner-occupier's building is destroyed?
Your business stops trading while its fixed costs keep running, and so does any loan on the building. In our experience, recovery from a total loss runs two to three years: 18 to 24 months to rebuild, then another 6 to 12 months for trading revenue to recover after reopening.
From the morning the building is destroyed, two clocks run side by side.
The business clock. Without usable premises, revenue can stop or fall while costs continue. Staff you cannot afford to lose, supplier commitments and loan repayments carry on. You might trade from a temporary location at extra cost while your customers find someone else.
The building clock. If there is a loan on the building, the repayments are still due every month. If your business pays rent for the building, that rent stopped the day it moved out.
Who helps if you ever have to claim?
On a policy we look after, a specialist claims manager will run your claim, and your broker will stay involved. That goes for the building entity's claim and the trading entity's claim alike. Nobody can promise what the insurer will decide. You will not be putting either claim to the insurer alone.
Why does each entity need cover in its own name?
Because the building and the business often belong to two different legal entities. One owns the building, such as a super fund, family trust or holding company, and a trading company runs the business. Each has to be insured under its own name, on two policies or one that names both, with the insurer's approval. A formal written lease between them is what makes loss of rent cover respond.
Where separate entities own the building and run the business, they have different assets, liabilities and creditors. The bank that financed the building lent to the building entity, not the trading company.
The building cover has to name the entity that owns the building, whether that is a person, a trust, a company or a super fund. The trading company needs its own cover for its fitout, contents, stock and business interruption.
What a business pack covers, and what it costs, is on Business Insurance.
If your fund or trust also owns property your business doesn't occupy, For Commercial Property Owners and SMSF Commercial Property Insurance explain how that ownership changes the insurance.
A computer retailing and wholesaling business we look after owns three strata units in a row of five, bought one at a time as the business grew. All three had ended up insured in the company's name. On a review a few years later, we asked the owners to confirm which entity actually owned each unit. The first was the company's. The two bought later were not: one sat in a trust, the other in the fund.
Nobody had noticed, because nothing had gone wrong yet. The policies were restructured to match the real ownership before any claim could test the mismatch. Their contents and stock cover needed no fixing at all, because that conversation had happened properly on day one.
Who pays the loan, or the rent, while your building is rebuilt?
If you have a loan on the building, repayments continue during the rebuild. Where your business pays rent to a separate building-owning entity, that rent may be needed to service the loan. Loss-of-rent cover protects that entity's rental income after insured damage. On the loss of rent we recommend at least 18 months, and often 24 or even 36, depending on the client. The rebuild comes first, and your own business still has to recover after it.
The bank expects repayments whether the building is being demolished, approved, tendered or rebuilt. Some loan facilities also require loss of rent cover as one of their insurance conditions.
Owner-occupiers can skip loss of rent because it sounds like something for landlords ("I'm the tenant, what's the point"). But where your business pays rent to your own building-owning entity, you are the landlord, and many landlords we start working with have no loss of rent cover either. The other gap is an indemnity period, the time the cover keeps paying, too short for a real rebuild. We recommend at least eighteen months, and the period is yours to set.
What insurance does an owner-occupier need?
You need to consider the building and the business separately, even when the same entity owns both. Where one entity owns the premises and another runs the business, each needs cover in its correct name. The lease helps establish the rent and which property each is responsible for insuring.
For the building owner:
- The building at full replacement cost, the price of rebuilding it today.
- Loss of rent for the building entity, at the rent the lease actually charges, with outgoings where the lease recovers them. On the policies we place it is part of the business interruption section, and it pays the rent the building entity loses. The lease should be at market rent, but the cover follows the real number. The period should outlast the rebuild.
- Property owners liability, at a limit that suits the building and what happens in it.
- Equipment breakdown for plant that belongs to the building, such as lifts and air conditioning.
- Flood assessed for the location, not assumed either way.
For the operating business:
- Business property: the fitout at replacement cost, contents, plant, machinery, electronic equipment, stock and customers' goods, counted as one total. Raising this sum insured can sometimes make little difference to the premium. If the lease makes the business responsible for the owner's fixtures, fittings or plant, ask us which policy they belong in, because the wording and the lease decide it.
- Business interruption for the business's profits, for a period that covers the rebuild and the trading recovery after it.
- Public and products liability, at a limit that meets your lease and what your business does.
- Glass, theft, and portable property cover for tools and items that leave the premises.
If you repair or hold customers' goods, you need those goods covered while they are in your care. Stock is insured at what it would cost you to buy it again, counted at cost plus freight and duty. If your stock peaks in a season, a sum insured set on the average holding is short in the peak month.
For the covers a commercial building can carry, start at Commercial Property Insurance.
Why do owner-occupiers get underinsured twice?
Because you carry two separate sums insured, and both drift. On the renewals we see, most building sums insured have only ever been indexed. When MCG Quantity Surveyors measured buildings, they found them underinsured by an average of 24 per cent, and 31 per cent for industrial property. The business side drifts the same way: the fitout figure is often a guess from move-in day, and the stock figure may never have met your peak season.
In our experience, many new clients come to us with no business interruption cover at all. Set up properly, it can be one of the dearer sections of a business pack, and cost is a big reason owners decline it. Some owners choose to carry that risk. Many new clients have no firm figure for their fitout either.
An owner-occupier added a mezzanine office inside their retail shop for about $145,000 and never added it to their insurance. A fire about a year later meant they paid for it a second time when the building was rebuilt.
Built, fitted out or bought anything since your figures were set? Ask us to go through the fit-out, contents, plant, machinery, electronic equipment and stock with you, so each figure covers what is on your premises.
Under co-insurance, a partial claim can be scaled down when a sum insured is short. That can happen to the building entity's cover and the trading entity's cover in the same fire. Get both figures wrong and you can be short on the rebuild and the fitout at once, while any loan repayments and payroll keep running. For how far building costs have run, with the measured numbers, see Underinsurance in Commercial Buildings.
What can an owner-occupier ask us to look at?
You can ask us to look at which entity is insured in which name, and at any lease between the building owner and the business. You might want to know whether the building sum insured would rebuild, or what state the roof is in. You might also ask whether loss of rent and business interruption would last as long as the rebuild that actually happens.
- The lease between related entities. Where the building owner leases to the business, we can explain what the insurance clauses mean for each policy.
- The building, measured. We commission a desktop building replacement estimate for you, free. We commission it for our purposes as your broker, to inform the advice we give you.
- The roof, from the air. Aerial imagery can show ponding or rust before it becomes an argument with the insurer. If it shows something that concerns us, we let you know what we saw. See Roof Condition Monitoring.
- Buying with a loan. Before settlement, the bank will want a certificate of currency, the insurer's proof that cover is in place, showing the building insured for the figure it asked for.
- The price. If the renewal went up and nobody explained why, we can look at the cover and the price together. You can then see whether a cheaper quote is cheaper because the sum insured is lower. What a building like yours costs to insure is on Commercial Building Insurance Cost.
Short answers
I own my building and run my business from it. Do I need two separate insurance policies?
Not always. The building owner and the business are often separate legal entities, and each must be insured in its correct name. Consolidated Insurance Brokers can quote it both ways, two policies or one that names both where the insurer agrees, and you choose.
My building is in my SMSF and I run my business from it. How does that affect my insurance?
The building's policy must be in the title holder's name, and the business needs its own cover. We arrange cover for both. For Commercial Property Owners and SMSF Commercial Property Insurance go further into fund and trust ownership.
What is loss of rent cover, and why would I need it if I'm the tenant?
Where your business pays rent to a separate building-owning entity, loss of rent cover protects that entity's rental income after insured damage. That income may be needed for loan repayments and other costs. We can arrange cover for the rent the building owner stands to lose. How loss of rent works is on Commercial Landlords Insurance.
Aren't business interruption and loss of rent the same thing?
No. Business interruption protects the trading business's profits, and loss of rent protects the building owner's rental income, so each sits with the entity that loses the money. You usually need both, one in each entity. The full comparison is at Business Interruption Explained.
What happens to my mortgage if my building is destroyed and I can't trade?
If you have a loan on the building, it keeps falling due. Any rent your business pays the building's owner stops with the building, and that rent may be what services the loan. Loss of rent cover replaces that income for the indemnity period you choose, so the period needs to outlast the rebuild.
How do I insure a fitout I've spent years building, in a building I own?
In the trading entity's cover, at full replacement cost. We can help you set that sum insured as one total, the fit-out your business has added and everything else it owns on the premises, updated as you keep improving it. For Business Owner Tenants goes through valuing a fit-out.
Do I need a formal lease between my super fund and my business for the insurance to work?
Yes. Loss of rent pays the rent your business would have paid your building entity, so a written lease between them needs to set that rent. Without one, the cover has no rent to replace. A lease on commercial terms, at market rent, is also a super fund compliance matter, and that detail is one for your accountant.
What's the right business interruption indemnity period if I own my building?
You hold two covers, and each has its own period. On the business interruption that protects your trading profits, we recommend 18 months. On the loss of rent that protects the building's rental income, we recommend at least 18 months, and often 24 or even 36. Each period is yours to choose. The rebuild comes first, and trade takes time to come back after you reopen. For what business interruption is and covers, see Business Interruption Insurance.
Talk to us about your building and business
Ring 07 3292 1111 to discuss the cover you need. We can explain the options for your building and business, how they fit together and what they cost.