One underinsured claim doesn't just cost you a building. It can reach into the rest of your portfolio.

Three things make property owners more exposed than they feel.

Indexation has been losing the race. Where a policy indexes the sum insured at all, the uplift typically tracks a building-cost index at a rate the insurer sets, and many commercial policies carry no automatic indexation whatsoever. Non-residential building construction costs across Australia rose 36.8 per cent between June 2020 and June 2026, and about 40 per cent since 2018 (Australian Bureau of Statistics Producer Price Indexes, construction, released 31/07/2026). A sum insured that has only ever been indexed, never re-measured, falls further behind every renewal, and even a proper valuation report from a few years ago drifts out of pace, especially if you chose a sum insured below the report's recommendation at the time. Across several properties, small gaps compound into a collective shortfall that can run into the millions.

Entities create gaps paperwork can't see. Properties accumulated over 10 or 15 years tend to end up in different names: yours, a family trust, an SMSF. If a policy names an entity that does not own the asset, the whole policy can fail at claim time. More on this below, because it is the most expensive mistake on this page.

The rent is the actual asset. For most owners the building is the vehicle and the rent is the point: it pays the loans, and often the lifestyle. Loss of rent cover is what keeps that income arriving after an insured event, and it only works if the amount, the period and the outgoings are all set deliberately. The mechanics live on Commercial Landlords Insurance; the short version is that our default indemnity period is 18 months, we recommend 24 wherever we can, and 12 is a floor we place only on a client's express instruction.

Sometimes a good broker can reduce the damage, though no one can undo it. In a 2025 storm claim CIB handled, a regional NSW landlord had insured a retail building for $500,000 against the roughly $1.99 million we advised in writing. The average clause still cut the partial-loss payout to about 48 cents in the dollar, worked out against 80 per cent of the building's corrected value at claim time of about $1.31 million rather than against the higher figure we had advised. But CIB found two wording points the client's own paid claims advocate had missed, and the insurer amended the settlement onto our figure. The full story is in The Co-Insurance Clause: What Every Building Owner Must Know.

On a total loss the full sum insured is paid, and the gap between that and the real rebuild cost is the owner's.

• The building, insured for what it would cost to rebuild today, with proper allowances for professional fees and debris removal, not a market value and not last year's number plus CPI. See Commercial Building Insurance.
• Loss of rent, long enough for a real rebuild and re-let, with the outgoings your leases recover (rates, land tax, insurance) included in the figure. Deep home: Commercial Landlords Insurance.
• Property owners liability, your own cover, at a $20 million benchmark. Your tenant's liability policy protects your tenant, not you; if the building itself hurts someone, the owner is the one who gets sued. The full why is on Property Owners Liability.
• Equipment breakdown for the plant that keeps the building tenantable: air conditioning, lifts, roller doors, switchboards. Leases commonly make servicing the tenant's job while capital failure stays with the owner, a split worth checking rather than assuming; we cover it on the landlord product page.
• Flood and cyclone, assessed property by property. Bundaberg, the Wide Bay, south-east Queensland and North Queensland all carry different exposures, and flood is not automatic: of the nine business pack wordings we place, two include it as standard, six cover it only if it was added and shows on your schedule, and one offers no way to add it in the wording. None prints a separate flood sub-limit, so check your schedule rather than assume either way. If a building is in Brisbane, the four flood layers Council maps, the hail history over the roof and the heritage and character overlays are covered on commercial building insurance in Brisbane.

Not every owner's building is a straight investment. If you run your own business from the building, you carry two risks that fail together, the building and the livelihood inside it, often in two different entities: start at For Business Owner-Occupiers. If you own a lot in a commercial strata scheme, the body corporate generally insures the building, and your fitout, your liability and any rent above the cap the scheme's policy pays are yours: see Commercial Strata Insurance. And if you are still working out which covers belong to the building and which to the business inside it, Commercial Property Insurance sorts that out and points you to the right cover for each.

And one portfolio-level question most owners never get asked: should each property keep its own business pack policy, or should the whole portfolio sit under one programme, one wording, one renewal? One programme is not a shortcut. It is more demanding: declared values across the set, elected sub-limits, individual underwriting. What you get in exchange is broader cover, where loss is insured unless excluded, and a single renewal across everything you own. Doing the information work properly is what makes it possible, and that work is ours. Which way to go depends on the portfolio's value and complexity together; as a rough marker, combined values around $5 million and up is where the conversation starts to make sense.

The three versions we see are all quiet. A property gets moved into a new structure and the policy keeps renewing in the old name. A building bought through a trust or SMSF gets insured in the director's personal name because that is who filled in the form. A trustee gets named without the trust behind it. Each one creates the same defect: the entity on the policy does not own the asset, and at claim time that is not a typo, it is a non-disclosure problem.

Here is an illustration, and we flag it as exactly that, an illustration rather than a claim we handled. A building owned by the Smith Family Trust is insured in the name of Smith Holdings Pty Ltd, the trading company, because the same person stands behind both. Fire guts the building. The insurer's first question is not about the fire, it is "who owns this building?", and the answer is: not the insured. Everything that follows is an argument you do not want to be having in the same week as a fire.

The SMSF version adds a second trap. If your super fund owns the building and your operating business is the tenant, there must be a formal, arm's-length written lease between the two entities. That is an SMSF compliance requirement, and the detail belongs with your accountant. Our side of it is blunter: no lease means no legal tenancy, which can mean the loss of rent section has nothing to attach to.

We proactively check the lease position as a matter of course for every client in this position, and if the lease makes the tenant responsible for insuring the owner's fitout or plant, the policies have to reflect that transfer too. The rent the policy insures follows the actual rent on the lease, and if your leases let you recover outgoings, those figures belong in the loss-of-rent sum as well. For the deep version of how insurance works when your super fund owns the building, see SMSF Commercial Property Insurance.

Most owners think of insurance and finance as separate files. The bank does not. Your loan conditions almost certainly require the building insured for full replacement value with the lender noted, some facilities specify minimum sums insured or loss of rent cover, and the obligation runs for the life of the loan. If a major claim comes up short, the security behind the loan is suddenly worth less than everyone assumed, and the conversation that follows can include a covenant review, a demand to restore the loan-to-value ratio, or, at the ugly end, selling another asset to do it.

Who is most at risk? Both ends of the spectrum, for different reasons. Newer, more leveraged owners have the least room for error: a shortfall they cannot fund themselves lands directly on the bank relationship. Longer-standing owners tend to have the biggest errors, because the sums insured were set years ago and have only ever been indexed. Neither group finds out until the week it matters, which is the entire argument for measuring the number now.

• A desktop building replacement valuation on every property, every year. Commissioned at no cost to you, for our purposes as your broker, to inform the advice we give you. Own four properties and you get four desktop valuations, not one for the flagship and indexation for the rest. See Desktop Building Replacement Valuation.
• A roof check on every property, every year. Nearmap aerial imagery reviewed alongside the desktop valuation, more than 1,200 checks a year across our clients, flagging issues while they are still maintenance rather than a claim dispute. See Roof Condition Monitoring.
• An entity and lease review. Every policy in the right name, financiers noted as interested parties, and leases between related entities actually in place before anyone relies on loss of rent cover.
• What the insurer knows about each building. EPS sandwich panel in the walls, an asbestos roof, a tenant who changed what they do, a renovation the insurer never heard about. If the insurer would not have taken the risk had it known, a claim can fail entirely, and no premium, high or low, fixes that. Telling us is enough; making sure the insurer knows, and the policy still fits, is our job.
• A floor under every number. We will not place a commercial building below 60 per cent of our own desktop valuation's rebuild figure. If you disagree with our number, the answer is your own formal valuation, which then sets the basis instead. 60 per cent is a floor, not full protection; the co-insurance clause can still reduce a partial claim below about 80 per cent. The goal is always the full, properly measured figure, reached at a pace you can afford.
• The one-programme assessment. We do not default either way; we weigh the portfolio's value and complexity and show you the comparison.
• Loss of rent set deliberately on every property. Default 18 months, we push for 24 wherever we can, and your outgoings figures included where the leases recover them.
• Risk advice, not paperwork audit. A review with us is also us telling you what information to get to us, so cover can be made adequate rather than merely documented. Your renewal gets shopped, checked and explained, every year.
• One account manager across the whole portfolio. Not a different broker per property, not a renewal call centre.

1. The review. Policy schedules, leases and entity details in; a written gap summary out. In our experience, the most common finding is a sum insured that has only ever been indexed and never re-valued. The wider numbers say why: around 1 in 10 small-to-medium businesses think they are underinsured (ICA/Woolcott 2015; Vero SME Index 2025), but when valuers actually measure buildings, the average gap is about 24 per cent, and 31 per cent for industrial property (MCG Quantity Surveyors, 2024). Five properties is five chances for that gap.
2. The measurements. The desktop valuations and roof checks described above, run across every building in the set.
3. One number, one broker. A dedicated account manager who knows the whole portfolio, calls you before renewal with what changed and why, and is in the room when a claim happens.

Want a 60-second self-check before you call? Three questions: When was each building last professionally valued, rather than indexed? Does each policy name the exact legal owner of that property? And what loss-of-rent period is on each policy, and does the figure include your recoverable outgoings? If any answer makes you pause, the review is worth an hour of your time.