Commercial Landlord Insurance: The Complete Guide (from a Brisbane Broker)
What insurance does a commercial landlord need?
Quick answerIf you own a commercial building and lease it to a business, you need four things: cover to rebuild the building, cover for the rent you'd lose if it burned down, liability cover in your own name (not your tenant's), and clarity on who insures the fitout inside it. Most new landlords find out what they were missing at claim time. This guide is what to sort out first.
You've just settled on a commercial property, or you're about to. The agent said "you'll need building insurance," the bank wants a certificate of currency before it will release the funds, and nobody has stopped to explain what any of that actually needs to include. You've taken on a building, a tenant and a set of obligations, and you didn't sign up to become an insurance expert overnight. That's what this guide is for: by the end of it you'll be able to have an intelligent conversation with any broker about what a commercial landlord actually needs to cover, and you'll know the questions that catch people out.
One thing to check before you read on. If you're renting out a house or a unit, this isn't your page. That's residential landlord insurance, a different product entirely. This page is for anyone who owns a commercial building, a shop, a shed, an office, a warehouse, and leases some or all of it to a business.
The four things every commercial landlord needs to cover
Quick answerFour things make up a landlord's insurance stack: the building itself (rebuilt at today's cost, not what you paid for it), loss of rent (your income if the building can't be leased while it's repaired), property owners liability (your own cover if someone is hurt on the property, separate from your tenant's policy), and a clear answer on the fitout question, which depends entirely on your lease.
The building. Insure it for its full replacement cost: what it would cost to demolish, redesign, get approvals and rebuild today. Not its market value, and not the purchase price. Those are three different numbers, because market value and purchase price both include the land, and land doesn't burn down. The structure does, and the rebuild figure is the number that has to be right. The full picture is on Commercial Building Insurance, and the way to get the number right is a desktop building replacement valuation.
The rent. If the building is damaged badly enough that your tenant can't trade from it, most commercial leases let the tenant stop paying rent while that's true. Loss of rent cover replaces that income. It has more traps than any other part of the stack, so it gets its own full section below.
The liability. When someone is hurt at your property, you can be drawn into the claim as the owner, whether or not you've set foot on the site in years, and your tenant's policy is not built to defend you. That's the third pillar, covered below.
The fitout. Who insures the fitout inside your building is not automatic. It depends on your lease, which is why it needs its own answer rather than an assumption. Covered next.
Most landlords think about the building and stop there. A policy that only gets the building right is a policy that only does a third of its job.
Whose asset is the fitout? The lease-dependent trap
Quick answerThere's no single answer, it depends on your lease. If the tenant fits out a bare shell themselves, the fitout is generally theirs to insure. If you (the landlord) provided a fitted-out space, that fitout is your asset, but your lease can still make the tenant responsible for insuring it. Read the lease before you assume either way.
There are three versions of this question, and they have three different answers.
Bare shell, tenant fits out. This is the simple, common case. The joinery, the kitchen equipment, the partitions, whatever the tenant installs, are generally the tenant's asset during the lease and the tenant's responsibility to insure.
Landlord-provided fitout. Some leases, common in retail strips and food precincts, hand the tenant a space that's already fitted out. That fitout is the landlord's asset, but the lease itself decides who has to insure it, and plenty of leases push the insuring obligation onto the tenant even though the landlord owns the asset. The deeper mechanics of how a lease can transfer that obligation are on our commercial landlord insurance page. This comes up constantly for strata unit owners in particular, and in our experience very few strata unit owners have ever had anyone walk them through what the strata scheme's policy does and doesn't cover, so the fitout inside the lot is usually the first surprise.
Make-good at lease end. Fixtures attached to a building can become part of the building at law, subject to what the lease says about removal. This edges into genuinely complex property law, so the honest answer is the simple one: the fixtures question is one for your lease and your solicitor to answer precisely. The insurance question is simpler once you know the answer: whoever the lease makes responsible for an asset is the one who needs to insure it.
The reason this matters is that an unanswered fitout question isn't a grey area at claim time. Someone's asset burns, and if nobody insured it because both sides assumed the other one had, the loss sits with whoever legally owned it and had no cover.
Whose name should the policy be in? The entity-naming trap
Quick answerYour policy has to name the exact legal owner of the building, including any trust. If you bought the property through a company, a trust or an SMSF and the policy ends up in your personal name (or vice versa), the insurer can decline the claim entirely, because the entity that suffered the loss isn't the entity on the policy.
This is the single cheapest, most common mistake that can void cover entirely, and it happens easily. Settlements move fast. A broker sometimes takes the name off whoever signed the enquiry rather than off the actual title. And a first-time landlord often doesn't think of their purchasing entity as "who I am" the way an insurer does: to you, the trust or the company is paperwork your accountant set up; to the insurer, it is the only party on the contract. The plain rule and the quick way to check yours are covered in the insured-name question on our commercial building insurance page.
We have had a real claim turn on exactly this question, and it was years of broker records that answered it. The claim that turned on the insured name.
For a sense of how far an insurer's rights go over what looks like a technicality, it's worth knowing what the courts have already upheld. In a Victorian Supreme Court case, an insurer's liability was reduced to nil because a homeowner didn't disclose a material fact about the property when taking out the policy. That's a different fact pattern to a wrong entity name, but the same principle sits underneath both: what's on the paperwork decides what the insurer owes, and it doesn't forgive an honest mistake.
Does my tenant's insurance protect me as the owner?
Quick answerNo. Your tenant's insurance protects your tenant's business. It doesn't protect you as the building owner. When someone is hurt at your property, lawyers name every party connected to it, including you, and your tenant's policy generally won't defend you unless a specific cross-liability clause was arranged for exactly that purpose.
Here's the mechanism in one paragraph. A liability policy defends the entity named on it. Being physically connected to an insured party, owning the building their business trades from, is not the same as being one. Even being noted as an "interested party" on your tenant's policy is not the same as being insured under it: it's a courtesy notation, not cover.
And leasing the building out does not hand off your own risk with the keys. In a real Australian court case, a building owner who had leased space to a gym was still made to pay half the damages, years after they'd left the arrangement, for a hazard created before the lease even started, because it was their own building work that caused it.
The fix costs very little relative to what it protects. The full mechanics, including the strata gap, the car-park claim story and the recommended limit, are on our property owners liability page.
Loss of rent: what it actually is, and how long the cover should run
Quick answerLoss of rent insurance replaces the rent you'd lose if your building was damaged badly enough that your tenant couldn't trade from it. It doesn't pay out because a tenant stops paying rent, only because the building itself can't be occupied. How long it pays for is your choice, and getting that number wrong is one of the most common landlord mistakes.
The mechanism is simple. Fire or storm damages the building badly enough that it can't be occupied. Under most commercial leases the tenant is legally entitled to stop paying rent while that's true. Loss of rent cover is what replaces that income while the building is rebuilt.
The two decisions that matter are how much it pays and for how long, and the second one is where people get caught. Our default in practice is 18 months. We actively recommend 24 months wherever we can. The floor is 12 months, and we only go there if a client won't pay for more or expressly instructs it. The final period is always your call, but the 12-to-18 upgrade usually costs almost nothing extra in premium, so it's worth doing as a matter of course.
Twelve months disappears faster than you'd think, and not just because rebuilds run long: a published AFCA determination saw a storm-damaged food business's payout run the full 12-month indemnity period even though the doors reopened after five, because trade takes longer to recover than buildings do. The full story is on our business interruption insurance page.
One more number most first-time landlords miss: outgoings. If your lease lets you recover outgoings from your tenant, rates, water, land tax, insurance, your loss-of-rent figure needs to include them, not just the rent itself. Otherwise a claim replaces the net rent while you keep paying every one of those costs out of your own pocket. The exact question a good broker asks to get this number right is on our commercial landlord insurance page.
Gross lease vs net lease. These are the two terms landlords search for when they are working out who actually pays for what. On a gross lease, the rent is set to include outgoings, so you as the landlord pay for the building insurance out of the rent you collect. On a net lease, the tenant pays outgoings on top of the rent, which commonly includes a contribution to the insurance premium. Either way, the policy itself belongs in the landlord's name, because you own the building being insured, regardless of which side of the lease ends up funding the premium.
How much loss of rent cover do I need, and for how long?
Quick answerEnough to replace the income you would actually lose, for as long as a worst-case rebuild or re-let could take, not last year's rent multiplied by twelve. Loss of rent cover has two dials that both have to be set right: how much it pays each month, and how many months it keeps paying. Two real CIB claims show what happens when each dial is tested.
The one we fought and got paid. When a fire shut down an alpine short-stay accommodation business, the insurer first questioned whether short-stay letting income was even covered. We put the entitlement in writing and worked the insurer's forensic accountant through the peak and off-peak rate evidence, and recovered about $92,000 in lost rent on top of a building and contents settlement of about $683,000. Short-term loss of rent is not automatic. It took a broker who read the wording and argued it.
The one where the cover ran out. A second property shows the other half. After a violent incident left a commercial premises stigmatised and hard to re-let, the owner could not find a new tenant for about 18 months. The loss-of-rent cover paid about $8,000 a month until its roughly $135,000 limit was exhausted, and then it stopped, about a week before a tenant was finally found. Nothing went wrong with the claim, and we recovered everything the policy allowed. The limit itself was the problem.
Put the two together and the lesson is simple. The amount to insure for is not last year's rent multiplied by twelve. It is how much income you would lose, and for how long, if a worst-case rebuild or re-let dragged on. Set the sum insured and the indemnity period (how many months the cover keeps paying) for that version of events, the one you hope never happens.
What the lease makes your tenant insure, and what stays yours
Quick answerYour lease, not who owns what, decides who insures what. A well-drafted commercial lease typically makes the tenant responsible for their own fitout, glass, and often the servicing of things like air conditioning. But capital items, like replacing a failed air conditioning unit outright, commonly stay the landlord's responsibility even though the tenant services it day to day.
This is the single organising idea that resolves most of a new landlord's confusion: insurance responsibility in a commercial lease follows the lease, not who happens to own or use something. The tenant typically carries their own fitout and glass, and often the day-to-day servicing of building plant. But servicing and replacing are two different obligations, and the gap between them is where landlords get caught. This exact trap is one of the most common ways landlords get caught, and we've written the full version of it on our commercial landlord insurance page.
The lease is also where your outgoings position lives. If it lets you recover rates, water, land tax or body corporate levies from your tenant, those recoverable amounts flow straight into the loss-of-rent sum covered above, because a claim that only replaces the rent leaves you funding all of them yourself regardless.
You don't have to work any of this out alone. We don't insist on seeing your lease, but when a client gives us a copy we read it: we confirm the insured names match the lease, that the loss-of-rent figure reflects what the lease actually provides, and that the advice we've given matches what you've signed. Best practice is simple: give your broker a copy of the lease.
What not to buy: rent default cover
Quick answerRent default cover, insurance against a tenant who simply stops paying, exists on only one policy we see in this market. We don't recommend it. We've never seen a claim paid on it, and most of the better business-pack policies don't even offer it as an option.
Most first-time landlords, on hearing this cover exists, assume it's the obvious thing to buy, because losing a paying tenant feels like the scariest scenario there is. The honest answer is that it isn't worth the premium on current evidence. Be clear about the distinction: loss of rent responds to physical damage that makes the building unusable. A tenant who stops paying while the building stands undamaged is a lease-enforcement problem, not an insurance one. The full treatment of this question is on our commercial landlord insurance page.
What happens if your building sits empty?
Quick answerMost commercial policies change once part of your building sits empty, and the standard allowance is 90 days. Beyond that, cover can restrict or lapse unless you've told your insurer. The trap is timing: you need to notify the insurer as a tenancy is ending, not after it's already vacant.
Ninety days is the standard allowance on the policies we place, and insurers treat vacancy differently for a plain reason: an empty building is a different, generally higher, risk. There's no one there to notice a leak, deter a break-in, or report a problem early. On a multi-tenancy building the test is generally whether half or more of the building is sitting empty, so keeping it more than half occupied usually keeps the clause quiet.
The practical instruction is about timing. As soon as you know a tenancy is ending, tell your insurer. Don't wait until the building is actually empty, because between tenants is exactly when a building is most exposed, and exactly when owners forget to make the call. The full vacancy Q&A is on our commercial landlord insurance page.
The blind spot: underinsurance and the single-building landlord
Quick answerMost of Consolidated Insurance Brokers' landlord clients own exactly one building as their landlord investment: their nest egg. It's this group, more than portfolio owners or owner-occupiers, that's most likely to be underinsured, because nobody ever came back and checked the number after settlement.
That is our own client-book observation, not a market statistic, but the market data points the same way. Only around one in ten Australian businesses think they're underinsured (Insurance Council of Australia research, 2015; Vero SME Insurance Index, 2025). But when quantity surveyors actually measure it, buildings come up an average of 24% short, and 31% short for industrial property (MCG Quantity Surveyors).
The single-building landlord is specifically exposed because of how the story usually runs: you bought once, insured at a sensible number at the time, and then let the policy renew on autopilot for years while construction costs moved much faster than any automatic indexation could track. The full arithmetic of that gap is in Underinsurance: The Biggest Risk to Commercial Building Owners, and what actually happens to a payout when the number is wrong is in The Co-Insurance Clause: What Every Building Owner Must Know.
The fix doesn't cost you anything. We commission a desktop building replacement valuation at no cost to you, from a registered valuer, so the number on your policy is a professional's figure, not a guess. The desktop valuation is commissioned for our purposes as your broker, to inform the advice we give you. See Desktop Building Replacement Valuation.
What's different for commercial landlords in Queensland?
Quick answerQueensland adds three things a national landlord guide will not always spell out: real flood exposure that has hit small businesses hard in living memory, a federal cyclone reinsurance pool that can lower premiums in the state's north, and a strata law that forces a five-yearly valuation most owners have never heard of. None of it changes what you need to insure. It changes how carefully you need to check the numbers.
The 2022 South East Queensland floods cost the state an estimated $7.7 billion in total, including $2.0 billion in residential and commercial property damage, of which $646 million was uninsured (Queensland Reconstruction Authority / Deloitte, June 2022 assessment). Small businesses in the affected areas reported $324 million in losses, and in surveys taken afterwards, 97% of small businesses in the affected areas said they had been impacted and 62% had to close, at least temporarily. If you own a commercial building here, that's not abstract history. It's the reason a landlord who has never made a claim still needs the numbers right before the next event, not after it.
If your building sits somewhere cyclone-exposed, it's worth knowing about the federal government's cyclone reinsurance pool. Participating insurers can offer reduced cyclone premiums under it, and the $5 million sum-insured threshold is assessed across every location you insure on a single policy, not building by building. Whether it applies comes down to which insurer covers you and whether that insurer has joined the pool, not something that gets applied for separately.
If you own a lot in a Queensland strata scheme and lease it out, there's a legal deadline most owners never hear about until it matters. Under the Standard and Commercial Modules of the Body Corporate and Community Management Act 1997, the body corporate must insure the common property at full replacement value and have that value independently reassessed at least once every five years. Building materials cost around 30 per cent more than they did three years ago (Insurance Council of Australia), so a valuation that's only two or three years old can already be running short. When the scheme's cover falls short after a claim, the body corporate has to raise a special levy on every lot owner to cover the gap, split by lot entitlement, whether or not you personally pushed for a proper valuation. It's the same underinsurance problem covered earlier in this guide, just with a statutory clock attached. The full mechanics, including how that levy gets split, are on our commercial strata insurance page.
A hypothetical example, not a real claim. Picture a landlord who owns a two-tenancy commercial building on a busy strip in inner Brisbane, say New Farm or Fortitude Valley. It was insured for a sensible number when it was bought eight years ago, and the sum insured has simply rolled over every year since. A summer storm cell causes flooding at ground level, damaging both tenancies badly enough that neither tenant can trade. If the building's sum insured hasn't kept pace with eight years of construction cost rises, the rebuild costs more than the policy pays, and the co-insurance clause can scale back what a partial loss recovers too. None of this has to happen. It's exactly what a desktop building replacement valuation is for, and exactly why the timing question above matters as much in Fortitude Valley as it does anywhere else in the country.
FAQ
I only lease out part of my building and use the rest myself. Is this still my page?
Partly. Read this guide for the landlord side of your cover: the building, the rent from the leased part, your liability and the fitout question all apply. For the part you occupy yourself, there's a separate structure question about which of your entities owns the building and which runs the business, and that's covered on For Business Owner-Occupiers.
I'm about to buy a commercial property that already has a tenant in place. What should I ask for before I settle?
Four things. A copy of the current lease, not just the agent's summary of it. The seller's certificate of currency, so you know what the building has been insured for. Confirmation of the exact entity you're purchasing into, because that's the name that has to go on the policy. And whether the building has ever been independently valued for insurance purposes, because if it hasn't, the sum insured you're inheriting is probably a guess.
Can I just use my home or personal insurance broker for this?
Ask them directly whether commercial landlord cover is a regular part of what they place. Many brokers who handle home and personal lines don't regularly place commercial property, and commercial policies are meaningfully different: they're modular rather than all-inclusive, and they carry the co-insurance clause that home policies forgive. The fuller comparison is in Direct Insurer vs Broker.
My tenant is actually my own business. Does this guide still apply to me?
No. You're an owner-occupier, not a landlord in the sense this guide means, and you have a different, two-policy structure to get right, including a lease between your own entities that decides whether loss of rent responds at all. Start at For Business Owner-Occupiers.
Related content
Product: Commercial Landlords Insurance (the product-mechanics page this guide feeds), Property Owners Liability, Commercial Strata Insurance (if your building is a strata lot).
Client type: For Commercial Property Owners (two or more properties, or complex entities), For Business Owner-Occupiers.
Cornerstone: Desktop Building Replacement Valuation.
Learn: Underinsurance: The Biggest Risk to Commercial Building Owners, The Co-Insurance Clause: What Every Building Owner Must Know, Direct Insurer vs Broker.
Tool: Underinsurance Risk Checker.
Based in Brisbane
Consolidated Insurance Brokers is at 109 James Street, New Farm QLD 4005, phone 07 3292 1100. Most of our commercial landlord clients are in South East Queensland, and we work with landlords further afield too. If you'd rather talk it through face to face, our door is at New Farm.