Commercial strata insurance provides cover for a strata titled commercial building, however the policy alone does not provide adequate protection for the unit owner/s. As a commercial landlord in a strata titled building, you can opt to take out your own insurance to cover for fixtures and fittings, machinery breakdown, business interruption (loss of rent) and most importantly, liability.
BUT DOESN’T MY COMMERCIAL STRATA POLICY ALREADY COVER ALL OF THIS?
No. Some strata policies do have extensions for unit owner’s fixtures and fittings, but only if they were part of the original build or when the premises were first registered. If a unit has had multiple tenants over the years, each making use of the space with their own fit-out, you can’t be guaranteed your insurer will cover this. And it’s not just the damage aspect; it’s also the liability risk you need to be concerned about.
For example, a strata titled commercial building was built and registered 12 years ago, and a few years later, one of the owners installed a mezzanine floor. This owner has since sold the property, and the buyer has included cover for this under the commercial strata policy as Landlords Fixtures & Fittings, and doesn’t bother taking out any other insurance. The new owner’s real estate agent shows a prospective tenant through the unit, and during this time the mezzanine steps give way, injuring both parties. Due to the severity of the injuries the lawyers for each party decide to sue the body corporate and the current unit owner. The body corporate will defend itself, and their insurer will make a case that they haven’t been negligent, and that their policy only covers claims which occur on common property. So both solicitors now go after the individual unit owner, and without the additional insurance, they will be left defending the claim themselves, and will need to pay any awards.
With premiums starting from as little as $400 a year, why would you risk not having protection?
If you would like a quote on Commercial Strata Unit Owner’s insurance, or would like to discuss any concerns you may have with your current insurance program, please call our office (07) 3866 5444.