Commercial Strata Insurance for Schemes and Lot Owners

Your body corporate may insure the building. That does not mean everything you own is covered.

A body corporate policy can be correctly arranged and a lot owner can still have a large uninsured exposure inside the lot. In Queensland the scheme's policy is also called commercial body corporate insurance. If you own a whole building on one title instead, start with commercial property insurance.

Usually you do. The body corporate's policy is written for the building and the common property. In Queensland, a system that serves one lot is usually not part of it, even when the unit sits on the roof.

We read the four commercial strata wordings we place (last read 04/10/2026). Where the building is in Queensland, three write an air conditioning unit serving a single lot out of what the scheme insures, and one of those also leaves it out of its breakdown cover. The fourth is silent, so the answer turns on what it counts as the building.

This is where owners find out at claim time. The lease decides whether you or your tenant looks after the system. If it puts it on you, or says nothing, and nobody holds breakdown cover, a failed unit can and does come out of the lot owner's pocket. Where the lease makes you responsible, insure the unit on your own policy, with breakdown cover on it, just as the owner of a whole office building would.

We read the lease, the scheme's wording and your policy together, so the unit sits under someone's breakdown cover and you know whether the limit on your schedule would cover replacing it.

Not reliably. Partitions, cabinetry, kitchens, cool rooms, signage, mezzanines and floor coverings, and improvements bought with the lot, are usually yours to insure.

Some strata policies cover lot-owner improvements, but on most of the wordings we compared that extension only switches on once the building's own sum insured has run out, which means only the largest losses. Strata wordings also commonly exclude temporary floor, wall and ceiling coverings.

On one of the four, an improvement only counts if it was installed within the three years before the last renewal or valuation, and the benefit is capped at no more than $300,000 a lot. A retail or medical fit-out is often larger and older than that. We check the window and the cap before we tell you what your own policy needs to carry.

Only up to a cap. On the wordings we place, a strata scheme's policy carries a capped loss of rent benefit for lot owners. The cap is a set limit, usually a percentage of the building sum insured, and it is commonly paid until the lot is re-let after an insured loss. If your rent is worth more than that cap, the gap is yours to insure under your own landlord cover. Lifting the cap is the insurer's call on that risk, not something chosen at renewal.

Our loss of rent guide covers what has to happen before rent cover pays, how to set the rent figure and how long the cover should run.

Usually your own policy, first. Whoever has the property insured pays to repair it. Their insurer then recovers from the other side if that party was responsible under the lease and liable at law, for example from the tenant's public liability policy. Liability claims can take a year or two to settle, so you don't want to rely on one. Insure what is yours, so it is fixed now.

Not fully. The body corporate's cover is written for the body corporate and the common property; some wordings give lot owners limited protection, but none replaces your own. A visitor tripped in a car park on the way to a tenant's shop, and only the landlord's own liability policy responded. The full story is on Property Owners Liability.

It depends on how the scheme was subdivided, and we check it for you. Buildings in a building format or volumetric format scheme are generally insured by the body corporate for full replacement value, including the cost of taking away debris and professional fees. A standard format plan can be different. If the buildings are detached, the lot owner may need their own building cover; if they share a common wall, the body corporate has building insurance duties for them. Your survey plan and community management statement name the format.

Where the body corporate must insure a building, Queensland law also requires an independent replacement-value valuation at least every five years. Whatever the plan format, public risk insurance for common property must be at least $10 million per event. $10 million is only the floor. $20 million has become the commonly recommended benchmark in strata.

Commercial strata schemes are usually run by a professional strata manager. If you are that manager, or you sit on the committee, this is the number to keep right. If you own a lot, it is still your money.

A loss is paid in full up to the scheme's sum insured. If that is not enough to finish the rebuild, the body corporate funds the difference through extra contributions, a special levy or borrowing, in proportion to lot entitlement. Not the owner who blocked the revaluation. Everyone.

Non-residential building construction costs across Australia rose 4.4 per cent in the year to June 2026, and about 40 per cent since 2018 (Australian Bureau of Statistics Producer Price Indexes, construction, released 31/07/2026). Insurers often index the figure between valuations, but that is not the same as checking the building properly. We recently reviewed a valuation that had omitted GST, leaving the replacement figure about $250,000 short. The valuation existed. The number was still wrong.

A low figure can also cost the scheme its catastrophe cover, the top-up for rebuilding costs that jump after a declared disaster. On one of the four wordings we compared, that top-up pays nothing unless the building sum insured was at least 80 per cent of the reinstatement cost just before the event.

Strata insurance vs building insurance walks through who insures what once a building is split into lots, how one claim can run across several policies, and what to check before you buy or renew.

Yes. A move from office use to a cafe, gym, workshop or other higher-hazard activity can change the insurer's view of the whole scheme, and so can vacancy. Tell us before it becomes a claim problem. Where commercial and residential lots share a scheme, mixed-use building insurance sets out who carries the building cover.

• Scheme cover. Building sum insured, valuation date, expiry and key extensions. We can help you get the scheme's certificate of currency and the date of its last valuation.
• Desktop building replacement valuation. We can commission one at no cost to you, for our purposes as your broker, to inform the advice we give you. It does not replace the independent valuation Queensland law requires where the body corporate must insure the building. See Desktop Building Replacement Valuation.
• Roof condition. Nearmap aerial imagery, part of more than 1,200 roof condition reviews each year.
• Your own cover. Fit-out, air conditioning, loss of rent and property owners liability, set around what you have at risk, and lined up with your tenant's cover.

CIB owns a commercial strata unit at Eagle Farm that was once one of our offices, so we know this from the owner's side too.

What moves a building premium is in our commercial building insurance cost guide.

You should not have to work out the boundary between the body corporate's policy, your policy and your tenant's policy yourself.

Call 07 3292 1111. We will review the layers together and tell you what is insured, what is not, and what needs to change.