Shopping for commercial property insurance feels overwhelming because policies look similar on the surface but differ massively in what they actually cover. Price matters, sure, but the cheapest policy often becomes the most expensive when you need to make a claim and discover huge gaps in coverage. Finding the best insurance for commercial property in Australia requires comparing specific policy features, understanding exclusions, and matching coverage to your property’s actual risk profile rather than just picking based on premium cost.
Look Beyond the Base Premium
Everyone focuses on the monthly or annual premium, but that number tells you almost nothing about actual value. Two policies with similar premiums can have completely different coverage limits, excess amounts, and claim conditions. I’ve seen property owners save a few hundred dollars on premiums only to face a $25,000 excess when they needed to claim—that “savings” disappeared instantly.
Check the excess structure carefully. Some policies have different excess amounts for different types of claims. Storm damage might carry a $5,000 excess while cyclone claims require 2% of the sum insured. On a property insured for $2 million, that’s $40,000 out of pocket before insurance pays anything. Higher excess reduces premiums, but it also means you’re self-insuring for smaller incidents.
Also compare how insurers calculate building values. Some use replacement cost, others use market value. Replacement cost covers what it would actually cost to rebuild today, accounting for materials and labor. Market value coverage might leave you short if rebuilding costs exceed what the property could sell for. In regional areas especially, rebuilding can cost way more than market value.
Understand What “Standard” Actually Includes
The term “standard coverage” means different things to different insurers. One company’s standard policy might include business interruption coverage while another charges extra for it. Same with legal liability, theft, malicious damage, and temporary accommodation costs if tenants need to relocate during repairs.
Make a list of what you actually need covered, then check each policy against that list. Don’t assume anything is included. Read the policy document or get the insurer to confirm in writing what’s covered. Vague marketing language like “comprehensive protection” doesn’t mean much when you’re filing a claim.
Natural disaster coverage varies wildly between insurers. Some automatically include flood and storm damage. Others exclude floods entirely or only cover it as an optional add-on. Earthquake coverage is almost always separate. In cyclone-prone areas, some insurers won’t offer coverage at all, or they exclude wind damage—which makes the policy basically useless for the main risk you face.
Compare Claim Settlement Methods
This part gets technical but matters hugely. Insurers settle claims using different methods, and the method affects how much you actually receive. Replacement cost coverage pays to replace or repair damaged items at current prices, without deducting for age or wear. Indemnity coverage accounts for depreciation, so you get less based on how old things were.
For buildings, replacement cost makes more sense because you need to rebuild to current building standards regardless of the structure’s age. For contents, it depends. New equipment depreciates fast, so indemnity coverage might leave you with a fraction of replacement cost. Some policies offer new-for-old replacement on contents, which costs more but provides better protection.
Also check if the policy pays upfront or reimburses after you complete repairs. Some insurers require you to pay contractors first, then submit receipts for reimbursement. Others pay contractors directly. If you don’t have cash reserves to front repair costs, the reimbursement model creates serious problems.
Read Exclusions More Carefully Than Inclusions
Policy exclusions matter more than what’s covered because exclusions tell you where you’re exposed. Every policy excludes certain things, but the specifics vary dramatically. Common exclusions include wear and tear, gradual damage, poor maintenance, faulty workmanship, and certain types of water damage.
Some exclusions are reasonable. Obviously insurance shouldn’t cover damage from neglecting maintenance. But watch for exclusions that eliminate coverage for likely risks. A policy that excludes all water damage from leaking pipes or burst connections isn’t much use in a building with aging plumbing. Exclusions for damage from pests, mold, or structural movement can leave you paying for repairs that happen commonly in older buildings.
Pay special attention to how the policy defines specific perils. “Flood” might be defined so narrowly that most water damage doesn’t qualify. “Fire” coverage might exclude smoke damage without flames. These definitional tricks let insurers advertise coverage they rarely pay out on.
Factor in Insurer Reputation and Claim Service
The best policy in the world doesn’t help if the insurer fights every claim or takes months to process payments. Research how different insurers handle claims. Check reviews from other commercial property owners, not just general customer reviews. Commercial claims work differently than residential ones and involve larger amounts.
Ask specifically about claim processing times and what documentation they require. Some insurers demand extensive proof for every item claimed, which delays everything. Others have streamlined processes with clearer requirements. Also check if they have experience with properties like yours. An insurer that mainly does residential work might struggle with commercial property claims that involve business interruption and tenant issues.
