Commercial Building Insurance. Know what it would actually cost to rebuild.

It depends on the building, its construction, location, use and claims history, so any figure without those details is a guess. What matters more than the headline premium is that it is priced against the right sum insured. A premium that looks cheap because the building is under-insured is not a saving, it is a shortfall waiting for a claim. We price it on a contestable panel against a rebuild figure you can rely on. What actually moves the number is set out in What Commercial Building Insurance Actually Costs.

The full cost to rebuild it today, including demolition, debris removal, professional and council fees, code upgrades and inflation, not the market value and not the purchase price. The reliable way to set it is a desktop building replacement valuation, which we commission at no cost to you. See Desktop Building Replacement Valuation.

Most commercial policies test your sum insured against at least 80% of the building's true rebuild cost. Insure above that line and a partial claim is not reduced for under-insurance; fall below it and the payout can be scaled down in proportion. On several of the wordings we place, insuring at the full figure in a current professional valuation from an approved valuer removes the test from your policy altogether. The clause in full is explained in The Co-Insurance Clause: What Every Building Owner Must Know.

On several of the wordings we place, yes. The underinsurance clause is switched off entirely where the sum insured is the full figure in a current professional valuation by an approved valuer. It is not every wording or every direct product, which is exactly why it is worth having a broker who can use it. Where it does not switch the clause off, the valuation still makes it harmless, because your number is right. We describe what the wording says, not a claims outcome. The full mechanics are on Desktop Building Replacement Valuation.

Usually yes. Lenders almost always require the building to be insured for its full replacement value as a condition of the loan, and some ask to be noted on the policy. Getting the sum insured right is not just about your own protection then, it is often a loan condition too.

Yes, but both cases make the sum insured harder to get right and more important. An older building can cost more to rebuild to current codes than its age suggests, and a renovation changes the rebuild figure and needs to be declared. This is exactly where a valuation earns its keep.

No. This policy covers the building itself. Your contents, stock and fit-out are their own covers, mapped on Commercial Property Insurance, and your income if the building cannot be used is Business Interruption Insurance.

Not under the building section itself. Loss of rent is its own cover, and the wordings differ more here than owners expect: on some of the wordings we place it runs for the full indemnity period you choose, while some direct products cap it at as little as three months regardless of how long the rebuild takes. If your building is tenanted, this is one of the first things we check. See Commercial Landlords Insurance and Business Interruption Insurance.

If the building is used for business, yes. Commercial building insurance covers the structure, the permanent fixtures and the external improvements for what it would cost to rebuild today. Business building insurance usually means this same cover with a business pack around it, which is the owner-occupier position set out on For Business Owner-Occupiers. If it is your own home you are insuring, that is Home and Contents Insurance instead.

The policy works the same way anywhere, but two Queensland questions carry more weight. Flood is usually a named peril with its own sub-limit and excess to read rather than assume, and owners in northern Queensland may benefit from lower premiums through the federal Cyclone Reinsurance Pool, which subscribed insurers apply automatically in their pricing. Our two offices are in New Farm (Brisbane) and Bundaberg. If it is your own home in Queensland, see Home and Contents Insurance.

You can buy it direct, but the co-insurance clause is the same either way, and with a direct policy nobody is keeping your sum insured right against it. What commercial building insurance brokers should earn their keep on is that number: we commission a desktop building replacement valuation at no cost to you, remarket your policy every year on a contestable panel, and on several of the wordings we place, insuring at the full valuation figure removes the clause altogether. The full comparison is on Why Use an Insurance Broker.

Not the premium. Two things decide it: whether the sum insured reflects what your building would really cost to rebuild today, and what the wording pays on top of that figure for professional fees, demolition and debris removal after a serious loss. The best commercial building insurance for you is the one that gets both right, which is what we test on a contestable panel every year rather than ranking brands.

Yes, and a lot of it. A substantial share of the commercial buildings we insure are in New South Wales, and a NSW building is placed exactly the same way as a Queensland one: the premium tested against up to nine insurers, the sum insured checked against a registered valuer's desktop assessment, and plain-English advice from a broker who knows the building. Distance does not change how a building is insured or how a claim is handled, and we have a representative based in Sydney. Call 07 3292 1111 and it works the same from Sydney as it does from Brisbane.

If you own a commercial building, whether it is an industrial shed, a retail strip, an office or a warehouse, this is the policy that pays to put the structure back after something goes wrong. It responds to sudden, insured events. It is not a maintenance plan, so damage that develops slowly over time sits outside it.

Most Australian lenders will not settle a commercial loan without seeing a Certificate of Currency proving the building is insured, so in practice you need this cover from the day you have a financial interest in the property, not the day you move in or find a tenant.

You start by setting the building replacement value, which must sit as close as possible to what it would actually cost to rebuild today. Get that number wrong and the underinsurance fine print can cut your payout (explained below). You then insure your rental income and choose how long you want it paid if the building has to be rebuilt. Our default is 18 months, we recommend 24 wherever we can, and the 12-month floor is given only where a client instructs it. From there you add landlord liability, and decide on the optional sections: flood, broken glass, machinery breakdown such as air conditioning, and contents if you own any fixtures worth listing.

The trap is assuming anything is included by default. Flood is a choice. Glass is a choice. A policy is only as good as the sections someone deliberately selected, which is why the selection conversation matters more than the quote.

Your lease is the document that decides it. Most commercial leases make the tenant responsible for outgoings, and building insurance is one of them. That is fair enough, because the tenant's business activities directly drive the premium. An accountant and a welder in identical sheds do not cost the same to insure.

Where it gets messy is multiple tenancies. If one tenant runs deep fryers and the other runs a bookshop, splitting the premium evenly means the bookshop is subsidising the fryers. A properly structured lease apportions the insurance cost by the risk each tenant brings, and your broker should be able to show you what each tenancy is doing to the price.

One thing the lease can never change: the policy itself belongs in the owner's name.

This is one of the most common and most expensive mistakes we see in commercial property. Buildings held in a family trust or a company get insured in a director's personal name, or a tenant arranges the policy in their own name because they are the one paying for it. Then a claim happens and the entity that actually owns the building is not on the policy.

Getting the named insured right matters for every part of the cover: the rebuild money flows to the owner, and the landlord liability section only defends the entity that is named. If your building sits in a trust or company structure, the policy wording needs to reflect that structure precisely. It is a two-minute check that decides whether the whole policy works.

Two forces set the direction. The first is the cost of rebuilding: the Insurance Council of Australia puts the rise in building costs at around 30% over the three years to early 2025, so your sum insured has to keep climbing just to stay accurate, and the premium follows it. The second is the insurance market cycle. Insurers swing between chasing profit and chasing growth, and right now they are chasing growth: Australian commercial property rates have been softening through 2025 and 2026, with well-run properties seeing genuine reductions.

That combination creates a specific trap. If your premium fell this year, check whether it fell because the market softened or because your sum insured quietly stopped keeping pace with rebuild costs. A cheaper premium on an underinsured building is not a saving. It is a discount on a policy that will not do its job.

This catches out buyers constantly. Ask your solicitor exactly when risk passes to you, because it is often long before the contract goes unconditional. Without cover in that window, you personally wear the cost of any damage, and in the worst case you can be contractually obliged to complete the purchase of a building that has just burnt down.

The fix costs nothing but a phone call. We can arrange cover to start the day you sign, and if the purchase falls over during due diligence the policy is simply cancelled. Getting insured a week early is free. Being uninsured for one bad day is not.

The order matters. The replacement value is first because every other section hangs off a policy that actually pays in full, and construction costs have moved so fast that a figure set three years ago is almost certainly short today. Index it every year, and get it independently checked rather than guessed (we commission a desktop building replacement valuation at no cost to you for commercial building clients, so the number on the policy is a valuer's, not an estimate).

Landlord liability is second because when someone is injured at the property, you get named in the claim whether or not you did anything wrong. Loss of rent is third because a destroyed building stops paying you the day it burns and does not start again until the rebuild finishes. Then the optional sections: flood is a deliberate choice on commercial policies, not an inclusion, and glass and machinery often belong to whoever the lease says they belong to.

Premium funding is useful for cash flow and plenty of our clients use it, but you should understand what it is: a finance company pays the insurer the full annual premium, and you repay the finance company monthly with interest. If instalments stop, the funder can cancel the policy to recover its money. So treat the monthly option as what it is, a loan secured against your cover, and make sure the repayment schedule is one the business can hold for the full year.

The two scenarios trip people in different ways, so keep them separate.

On a partial loss, the co-insurance clause (sometimes called the average clause) lets the insurer scale the payout down in proportion to how far your sum insured falls below what the policy requires. Many commercial policies test against at least 80% of the true rebuild cost. On a total loss there is no scaling: you receive the full sum insured, and every dollar between that figure and the real rebuild cost is yours to fund. The formula, the worked numbers and the published determinations where this has happened are in The Co-Insurance Clause: What Every Building Owner Must Know.

This is not a rare problem, and the reason it persists is that owners cannot see it. Only about one in ten businesses think they are underinsured (Insurance Council of Australia research, 2015; Vero SME Insurance Index, 2025), but when quantity surveyors actually measure it, buildings come up around 24% short on average, and 31% short for industrial property (MCG Quantity Surveyors, 2024). Why the gap has grown, and how to close it, is covered in Underinsurance: The Biggest Risk to Commercial Building Owners.

It is also why we do not let clients guess the number. For commercial building clients, Consolidated Insurance Brokers commissions a desktop building replacement valuation from a registered valuer, at no cost to you, for our purposes as your broker, to inform the advice we give you, so the sum insured on your policy is a professional's figure, not an estimate that fails the 80% test at claim time.

So the honest answer is that it is optional the way car registration is optional if you never drive. The moment a bank, a tenant or a body corporate is involved, someone in the chain will demand proof of cover. And the deeper point is that the legal question is the wrong question. The building is usually the single largest asset in the structure that owns it. The decision is not whether the law makes you protect it, it is whether you could fund the rebuild yourself. Almost nobody can, which is why the requirement exists in every lender's checklist even though it sits in no statute.

The distinction matters most when working out who insures what. A landlord insures the building. A tenant insures their fitout, contents and stock. An owner-occupier insures both, and often through two different entities, which is where structures go wrong (the building sits in a trust, the business trades through a company, and each policy has to name the right one).

Strata adds another layer: the body corporate insures the building, so a lot owner's "building" cover is really about their fitout and their own liability. If you are not certain which side of these lines your assets sit on, that is precisely the conversation to have before renewal, not after a claim.