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Safeguarding Your Business: A Comprehensive Guide to Commercial Property Insurance  

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When protecting your commercial property in Australia, unforeseen events like accidents, natural disasters, and theft can pose significant threats to your assets. In this guide, we’ll explore these aspects of commercial property insurance:  

  • Glass Insurance   
  • Public Liability   
  • Flood Coverage   
  • Theft and Burglary Insurance  
  • Machinery Breakdown Insurance   
  • Impact of Property Location   
  • Insurance for Heritage-Listed Commercial Properties  
  • Customised Insurance Solutions for Unique Properties  

Glass Insurance in Commercial Policies  

Glass insurance offers protection against the financial impact of unexpected glass damage. In the event of external glass breakage, insurers generally cover the cost to repair or replace glass with similar quality, adhering to current Australian Standards.  

What’s Typically Covered:  

  • External glass breakage  
  • Signs made of glass or plastic that form part of an illuminated sign  
  • Costs for after-hours service, express delivery, and overtime by repairers  

What’s Typically NOT Covered:  

  • Repair or replacement for glass that is stock  
  • Repair or replacement for glass that is in poor condition (e.g., chipped) when the period of cover commences  
  • Repair or replacement for glass damaged in transit  

How Much Does Glass Insurance Cost?  

The premium for glass insurance typically ranges upwards of $150 per year. Businesses may find that including glass insurance as part of a larger business package policy can result in a more economical cost compared to having glass insurance as a standalone policy.  

Public Liability Insurance for Businesses  

If you interact with the general public as part of running your business, there’s always a risk an accident could happen. If a patron falls or trips over at your premises or a staff member damages customer property, you could be legally liable to pay compensation. Public Liability Insurance covers compensation you’re liable to pay and the reasonable legal fees incurred to defend a claim against you.

What’s Typically Covered  

  • Injury or Property damage claims arising from interactions with the public on your premises  
  • Legal fees incurred associated with defending against a liability claim  
  • Medical fees for injuries sustained by third parties on your property  

What’s Typically NOT Covered:  

  • Intentional actions that result in harm or damage  
  • Claims related to employee injuries (covered under workers’ compensation)  
  • Professional errors or negligence (covered under professional liability insurance)  

Example Scenario: A slip that injures non-employees.  

Flood Coverage in Commercial Insurance  

Floods can wreak havoc on commercial properties, causing extensive damage and financial losses. Flood coverage is often a separate component due to the unique risks associated with flooding. As such, businesses need to purchase a separate flood insurance policy to ensure adequate protection. Understanding flood coverage in commercial insurance is crucial for businesses, especially those located in flood-prone areas or regions with a history of heavy rainfall.  

Understanding Policy Exclusions

Even if a policy excludes flood damage, it may still cover events such as storm or rainwater damage. Some insurers consider rainwater run-off as part of storm cover, while others may exclude it. It’s essential to check the policy wording and consult with the insurance broker to understand the coverage provided.  

Insurer’s Determination of Flood Risk

Insurers determine flood risk using various databases in partnership with state and territory governments. According to government flood mapping, the databases contain addresses overlaid with known flood risk. Individual insurers decide criteria for determining flood risk, considering factors such as local government flood mapping, historical flood information, terrain data, and claims history.  

Understanding risk factors, the cost implications, and the detailed terms of coverage are vital for making informed decisions. Property owners can tailor their insurance policies to meet specific needs by consulting with insurance professionals, ensuring resilience against unpredictable weather events and potential financial losses.  

Theft and Burglary Insurance Options  

Business Burglary Insurance, also known as Commercial Burglary Insurance or Business Theft Insurance, is a specific insurance coverage option designed to protect property owners against burglary, theft, or robbery losses. The burglary costs can accumulate quickly due to building and asset damage, loss of stock, cash, and more.

It provides financial compensation for stolen or damaged property and may cover associated expenses related to break-ins or theft attempts.  

Typical Coverage Inclusions

  • Reimbursement for stolen inventory, equipment, or assets.  
  • Coverage for damage to premises caused by a burglary.  

Business Burglary Insurance Typically Covers

  1. Property Loss: Coverage for the loss or damage to business property, including equipment, inventory, supplies, and other assets resulting from burglary or theft.  
  2. Break-In Damage: This extends to the damage caused to the premises during a burglary or theft attempt

What’s Typically NOT Covered:

  • Some policies may exclude certain types of theft, like employee theft.  
  • Failure to meet security requirements outlined in the policy.  

Machinery Breakdown Insurance Coverage  

Machinery breakdowns can bring operations to a standstill, leading to significant financial losses. ‘Breakdown’ refers to unforeseen and sudden physical damage to specified machinery, necessitating repair or replacement.   

Coverage Inclusions:  

Repair or replacement costs for damaged machinery are specified on the insurance policy schedule.  

Protection against unforeseen breakdowns that disrupt business operations.  

What’s Typically Covered:  

  • The breakdown of machinery specified on the insurance policy schedule.  

What’s Typically NOT Covered:  

  • Loss or damage arising from wear, tear, or gradual deterioration.  
  • Replacement of expendable parts or normal maintenance failures.  
  • Damage caused by fire, smoke, soot, or chemical explosions.  
  • Damage resulting from lightning, impact of vehicles, aircraft, or watercraft.  
  • Events such as earthquakes, subterranean fires, volcanic eruptions, landslips, subsidence, storms, floods, and water escaping from external sources.  
  • Theft or burglary (as separate theft insurance can be purchased).  
  • Intentional or malicious damage.  

Navigating Commercial Property Insurance: The Intersection of Location and Risk  

Location is a defining factor that shapes premium rates, coverage options, and overall risk mitigation strategies. Commercial property locations are categorised based on considerations like the local economy, traffic patterns, transport accessibility, parking facilities, and environmental factors.  

Insurance for Heritage-Listed Commercial Properties  

Heritage-listed commercial properties are vital in maintaining a connection to our past. These structures often showcase architectural styles, craftsmanship, and stories that reflect a bygone era. Whether it’s a historic storefront in a bustling city or a grand mansion with a storied past, these properties contribute to the cultural fabric of communities and nations.

Unique Risks and Considerations  

Insuring heritage-listed commercial properties comes with its own set of challenges. These buildings’ age and construction methods may differ significantly from modern structures, impacting the assessment of risks. Additionally, the specialised materials used in heritage properties may be harder to source, making restoration and repairs more complex and costly.  

Coverage Tailored to Heritage Preservation  

Insurance for heritage-listed commercial properties typically involves a tailored solution so as to address the unique risks associated with these structures. Here are key considerations:  

1. Rebuilding and Restoration Costs  

 Heritage properties often require specialised restoration techniques and materials. Insurance coverage should account for the potentially higher costs of rebuilding or restoring a heritage-listed building to its original condition, including sourcing period-specific materials and skilled craftsmen.  

2. Business Interruption  

In the event of damage, business interruption coverage is crucial. Heritage-listed properties may face extended restoration periods due to the need for specialised expertise and materials. Business interruption coverage helps mitigate the financial impact of prolonged closures.  

3. Legal and Regulatory Compliance  

Heritage-listed properties often come with stringent regulations and requirements. Insurance coverage should address legal liabilities associated with compliance, ensuring that the property owner is protected in the event of regulatory challenges or disputes.  

Customised Insurance Solutions for Unique Properties  

Tailored insurance solutions are custom plans assembled so that they meet the specific needs of individual clients or businesses, aiming to provide comprehensive coverage while addressing unique risks and potential exposures. These unconventional aspects often translate to distinct risks that may not be adequately addressed by off-the-shelf insurance policies. As a result, businesses occupying these properties require insurance solutions that are as unique as the spaces they inhabit.  

Comprehensive Coverage  

Standard policies may overlook nuances that are crucial for adequate protection, leaving gaps that could be financially detrimental in the event of a claim.  

Property Valuation 

Accurate valuation of unique properties is paramount. Customised insurance should reflect the true value of distinctive features, whether they are architectural, historical, or tied to specialised functionality.  

Specialised Risks

Identifying and understanding the unique risks associated with a property is crucial. This may include factors such as unconventional construction materials, heritage considerations, or specific risks related to the property’s function. 

Regulatory Compliance 

Some unique properties may be subject to specific regulations or compliance requirements. Customised insurance should address these considerations to ensure adherence to legal obligations. 

Frequently Asked Questions

What does Glass Insurance cover?  

Glass Insurance covers external glass breakage, destruction of stock or contents caused by broken glass, and signs made of glass or plastic forming part of an illuminated sign. It includes costs for after-hours service, express delivery, and overtime by repairers.  

What does Public Liability Insurance cover?  

Public Liability Insurance covers property damage or injury claims arising from interactions with the public on your premises. It also includes legal fees for defending against liability claims and medical fees for injuries sustained by third parties on your property.  

What is the cost of Public Liability Insurance?  

The cost varies based on factors such as the nature of your business, the level of coverage needed, and your location. Premiums range from a few hundred to several thousand dollars per year.    

Why is Flood Coverage separate in commercial insurance?  

Flood Coverage is often separate due to the unique risks associated with flooding. While standard commercial property insurance covers many perils, flood damage requires specific attention.  

What is not covered by Business Burglary Insurance?  

Some policies may exclude certain types of theft, like employee theft and failure to meet security requirements outlined in the policy.  

What additional coverage might be needed for off-site activities?  

For off-site activities or transporting goods, additional coverage like Portable Business Equipment Insurance or inland marine insurance may be required. 

ACS Financial has provided expert insurance advice and tailored insurance solutions across Australia for 30 years. Our team of insurance experts have access to a broad range of products that will protect your activities, allowing your investment or business to grow and flourish.

Contact our team at 1800 860 787 to discuss your commercial insurance and protection requirements today.

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