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 How Much Does Commercial Building Insurance Cost in Australia?

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 the desktop building replacement valuation 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. There is no general Australian law that makes you insure a commercial building. Outside a strata or community titles scheme, the requirement almost always arrives from a lender or a lease rather than a statute. What insurance is required on a commercial building sets out each one and who imposes it.

Yes, but both 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 must be declared. This is where a valuation earns its keep.

No. This policy covers the building itself. Your contents, stock and fitout 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. 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 the same cover with a business pack around it, the owner-occupier position set out on For Business Owner-Occupiers. If it is your own home, that is Home and Contents Insurance instead.

The policy works the same way anywhere, but two Queensland questions carry more weight. Flood cover is not automatic on every wording we place: two include it as standard, six only if it has been added and shown on your schedule, and one does not offer it. Check your schedule rather than assume. 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. First, whether the sum insured reflects what your building would really cost to rebuild today. Second, what the wording pays on top of that figure for professional fees, demolition and debris removal after a serious loss. The best policy 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. A NSW building is placed exactly the same way as a Queensland one. We test the premium against up to nine insurers. The sum insured is checked against a registered valuer's desktop assessment. The advice is plain English 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.

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

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

Start with the building replacement value. It must sit as close as possible to today's rebuild cost. Get it wrong and the underinsurance fine print can cut your payout (explained below). Next, insure your rental income and choose how long it is paid during a rebuild. Our default is 18 months, we recommend 24 wherever we can, and the 12-month floor is given only where a client instructs it. Then landlord liability, and the optional sections: flood, broken glass, machinery breakdown such as air conditioning, and contents if you own fixtures worth listing.

The trap is assuming anything is included by default. Glass is a choice. Flood is included from the start on two of the nine wordings we place, is an add-on that must show on your schedule on six, and is not offered on one, so check your schedule for the word flood. A policy is only as good as the sections someone deliberately selected, so the selection conversation matters more than the quote.

Your lease decides it, so read it rather than assume: two buildings described the same way on a listing can apportion insurance completely differently. Who holds the policy and why, what an outgoing is, how the premium is split in a multi-tenant building, what happens when the lease says nothing, and where the fitout sits are all worked through in Who Pays for Building Insurance on a Commercial Property?

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

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

Two forces set the direction. First, the cost of rebuilding: non-residential building construction costs across Australia rose 4.4% in the year to June 2026, and about 40% since 2018 (ABS Producer Price Indexes, construction, released 31/07/2026). Your sum insured has to climb just to stay accurate, and the premium follows. Second, the market cycle. Insurers swing between chasing profit and chasing growth, and right now it is growth. Australian commercial property rates have softened through 2025 and 2026, with well-run properties seeing genuine reductions.

That combination creates a trap. If your premium fell this year, check why: the market softened, or 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 buyers out constantly. Ask your solicitor exactly when risk passes to you. It is often long before the contract goes unconditional. Without cover in that window you wear the cost of any damage yourself. At worst you can be contractually obliged to settle on a building that has just burnt down.

The fix is 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. Replacement value is first: every other section hangs off a policy that actually pays in full. Construction costs have moved so fast that a three-year-old figure is almost certainly short today. Index it every year and have it independently checked, not guessed. For commercial building clients we commission a desktop building replacement valuation at no cost to you, so the number on the policy is a valuer's, not an estimate.

Landlord liability is second: 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: a destroyed building stops paying the day it burns and does not pay again until the rebuild finishes. Then the optional sections: on most of the wordings we place, flood has to be added and shown on your schedule (two include it as standard and one does not offer it), and glass and machinery often belong to whoever the lease says.

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

The two scenarios trip people differently. Keep them separate.

On a partial loss, the co-insurance clause (or 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 get the full sum insured, and the rest of 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 rare, and it persists because 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 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 in Underinsurance: The Biggest Risk to Commercial Building Owners.

So 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. The sum insured on your policy is then a professional's figure, not an estimate that fails the 80% test at claim time.

The distinction matters most for who insures what. A landlord insures the building. A tenant insures their fitout, contents and stock. An owner-occupier insures both, often through two different entities. That is where structures go wrong: the building sits in a trust, the business trades through a company, and each must name the right one.

Strata adds a layer: the body corporate generally insures the building. But where the lots sit in a standard format plan and the buildings are detached, joining the scheme's insurance is optional and the building is the lot owner's. So check which plan the scheme is on. Either way, a lot owner's "building" cover is really their fitout and their own liability. If you are not certain which side of these lines your assets sit on, have that conversation before renewal, not after a claim.