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Commercial and mixed-use strata insurance solutions

Protect shared property across commercial, industrial and mixed-use strata. Marsh can help assess property and occupancy risks, arrange insurance and support you through claims.

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What is insurance for commercial strata schemes?

Insurance for commercial strata schemes is designed to help cover common or shared property managed by a strata title, body corporate or owners corporation. Generally, a strata-titled property with 20% or more of its total building floor space used for commercial purposes may be treated as commercial strata for insurance purposes, however insurers may also look at the commercial and residential floor-space mix and how each commercial lot is used.

A mixed-use property can contain both commercial and residential lots. Insurers may assess Construction, Occupancy, Protection and Exposure, commonly called COPE. They may also request a site survey to better understand the property and tenant risks.

The Insurer’s assessment may consider construction materials, tenant activities, fire protection, security, location, sums insured and claims history.

Property types we can help insure

Insurance for commercial strata schemes can respond to shared property risks across different building types, subject to insurer acceptance and policy terms, conditions and exclusions..

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Government and office buildings

Shared buildings, common areas, fixtures and plant across government offices and other strata-titled commercial properties.

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Industrial strata sites

Shared buildings, services and common areas across strata-titled industrial properties and sites.
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Mixed retail and residential buildings

Mixed-use strata can include buildings containing residential lots above supermarkets, restaurants or other ground-floor commercial premises.

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Build-to-rent developments

 
Developments where lots are retained by one owner or entity and leased directly to tenants, rather than sold individually.
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Master-planned communities

 

Insurance may be considered for shared property within master-planned communities, subject to the ownership structure and policy terms.

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Company title and community schemes

Insurance considerations may apply to company title and community association properties with shared buildings, facilities or common areas.

Commercial and residential strata compared

Residential strata generally applies when more than 80% of the total building floor space is used for non-commercial purposes. A property with 20% or more of its floor space used commercially may require commercial strata insurance.

The difference is not limited to the floor-space split. Commercial and mixed-use properties can contain different tenant activities, shared equipment and business operations. Insurers may request information about each commercial lot before deciding whether to offer cover, the type of cover to offer and on what terms.

What insurance for commercial strata schemes may cover

selected option

Cover for your property

Commercial strata policies can combine property, liability and other sections. Available cover depends on the building, tenant mix, insurer, schedule and policy wording.

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Building and common property

May cover accidental loss or damage to insured buildings, common areas, fixtures, fittings, shared plant and other property defined in the policy.

Property owners’ liability

Subject to policy terms and conditions, may respond when the insured owners corporation, body corporate or other strata plan becomes legally liable for personal injury or property damage.

Rent and temporary accommodation

Subject to policy terms and conditions, temporary accommodation may apply when insured damage makes an owner-occupied residential lot unfit to live in. Loss of rent may apply to a tenanted lot if available under policy terms and conditions.

Machinery breakdown

Cover may be available for sudden breakdown of insured electrical, electronic and mechanical machinery, boilers, pressure vessels and other plant.

Fidelity and office bearers

Selected policies may include cover for fraudulent misappropriation of scheme funds and certain liabilities arising from office bearers’ wrongful acts.

Legal and audit expenses

Some policies may provide specified legal expenses or professional fees connected with workplace matters, disputes or government audits.

Check the limits and exclusions

All commercial strata policies include terms of cover, exclusions, conditions, excesses and limits. Read the schedule and policy wording to understand how cover applies and let your broker know of any questions.

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Wear, tear and maintenance

Depending on policy terms and conditions, wear and tear, gradual deterioration, corrosion, rust, mould, normal upkeep and a lack of maintenance are commonly excluded.

Defects and faulty work

Depending on policy terms and conditions, the cost of correcting defective design, faulty materials or workmanship is commonly excluded. Resulting damage may be treated differently under the policy.

Tenant and lot owner property

Strata building cover may exclude tenants’ contents and other property, as well as lot owners’ personal contents. Separate insurance may be needed. Please carefully read the policy terms and conditions.

Undisclosed changes or activities

Changes to occupancy, commercial activities, building works or risk details may affect insurer terms. Tell your broker before the risk changes.

Optional events and benefits

Flood, catastrophe and other optional benefits may not apply automatically. Check the policy wording and schedule for any sub-limits, excesses and conditions.

How tenant mix can affect insurance terms

The type of commercial tenant and how each lot is used can affect premiums, policy terms and the insurers willing to consider the property. Insurers may look at the business activity, equipment, fire safety, chemicals, stored goods, property condition and claims history.

Changes to commercial occupancy should be reported to your broker so the insurer can review the risk. Requirements and insurer appetite vary.

 

Commercial tenancy or risk

Why insurers may look more closely

Possible insurance effect

Tattoo parlours

These tenancies may be assessed as having greater exposure to malicious damage, fire or vandalism.

Restricted insurer appetite, higher premiums, excesses or special conditions may apply.

Dry cleaners

Chemical storage and the use of heat during the dry-cleaning process can increase fire risk. 

Insurers may request more information, require risk controls or offer different terms.

Storage tenancies

The type and quantity of stored items may be difficult for insurers to identify and assess.

Insurers may restrict placement, request more detail or apply different terms.

Recycling and scrap dealers

Large quantities of potentially flammable materials can increase the fire load and allow fire to spread.

Fewer insurers, higher premiums or additional conditions may apply.

Vacant lots 

Vacant premises may be exposed to malicious damage, while water damage can remain unnoticed and increase the loss.

Notification, inspection or security conditions and different premiums or cover may apply.

Commercial cooking

Fire risk can depend on extraction cleaning, fire equipment, maintenance and written records.

Insurer approval and additional conditions may apply. Not meeting them may affect cover.

Examples of commercial strata claims

Claims depend on the facts and circumstances surrounding an incident and policy wording. Some examples include:

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Fire and smoke damage

Fire can damage shared structures, services and adjoining lots. Commercial cooking and other tenant activities may require extra risk information.

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Vandalism and malicious damage

Vandalism and malicious damage can affect common areas, fixtures and shared property, subject to the insured event and policy wording.

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Liability linked to tenant activities

A visitor, contractor or other party may allege injury or property damage connected with tenant activities or common property. Cover depends on the policy.

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Water escape damage

Burst flexi hoses, appliance connections, ageing plumbing, blocked drains and roof leaks can damage insured property. Cover depends on the cause and policy terms.

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Storm, hail and rainwater damage

Storm, hail and rainwater can damage insured buildings and common areas. Flood cover depends on the policy and what is shown in the schedule.

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Machinery breakdown

Sudden breakdown of insured lifts, pumps, air conditioning or other plant may lead to repair or replacement claims, subject to the selected cover.

Managing commercial tenant and property risks

Before approving a commercial tenant, understand the activities that will take place in the lot. Relevant information may include equipment, fire-safety measures, chemicals, flammable goods, cleaning arrangements, safe work practices and expanded polystyrene. Keep tenant records up to date and tell your broker when the tenant or use changes.

A well-maintained property with clear walkways, suitable waste storage and appropriate safety practices may be viewed more favourably by insurers. Poor maintenance, clutter and repeated claims may lead to higher premiums, additional excesses, special conditions or fewer placement options.

The building sum insured should reflect the cost of reinstating the insured property, rather than its market sale value. It should consider costs such as demolition, debris removal, surveying, engineering and architectural fees. A professional valuation by a certified valuer may help, and improvements should be considered when the sum insured is reviewed.

Why work with Marsh?

Marsh’s strata specialists can help you understand property risks, approach insurers and manage the insurance process.

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Dedicated strata support

 

A dedicated client manager and service team can coordinate your placement, renewal and day-to-day insurance questions.

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Insurer placement and negotiation

Marsh can present your risk to insurers, manage key negotiations and explain the available terms in everyday language.

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Risk and valuation support

 

Risk consulting services may include asset valuations, property risk engineering, surveys, EV charging assessments and natural catastrophe modelling.

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Claims support

 

Marsh can help lodge your claim, communicate with the insurer, gather required information and keep you informed as the claim progresses.

Why use a broker for commercial strata?

 

Commercial and mixed-use properties can involve different tenant activities, shared services and policy sections. A broker can help gather the information insurers need, explain differences between the available options and iliaise with the insurer on claim resolution options.

Marsh can also support your renewal and claims. This includes helping you review uninsured risks and whether the insurance structure continues to reflect the property and its occupancy.

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Explore strata insurance solutions

Explore insurance and risk support for the people and organisations involved in managing, governing or developing strata property.

Frequently asked questions

  1. Complete and submit a claims form to strata@marsh.com.
  2. Once Marsh has received all required information, the claim will be registered and sent to the relevant insurer within 1 business day. 
  3. After all relevant information has been received and any necessary enquiries have been completed, the insurer will aim to respond within 10 business days. 
  4. Claim updates are provided by the insurer to claimants as agreed, or Marsh will issue written acknowledgement to the notifying party (intermediary or direct customer) every 10 days. 
  5. Marsh will make reasonable efforts to share updates as soon as they become available. 
  6. In most circumstances, the insurer aims to determine the claim within 4 months of lodgement, although this may be affected by exceptional events such as catastrophes or delays in receiving responses.

Download claims form

Insurance for commercial strata schemes is designed to help cover buildings, common property and shared assets managed by a strata title, body corporate or owners corporation. Depending on the policy, it may also include liability and other insurance sections.

Generally, a strata-titled property with 20% or more of its total building floor space used for commercial purposes may be treated as commercial strata for insurance purposes. The insurer may also consider how the commercial lots are occupied and used before offering insurance options.

Mixed-use buildings containing commercial and residential lots may be eligible for commercial strata insurance. The insurer may consider the floor-space mix, tenant activities, construction, location, security and other property details before offering terms.

Depending on the policy, cover may include insured buildings, common property, common contents and property owners’ liability. Other sections may include loss of rent, temporary accommodation, machinery breakdown, fidelity guarantee and office bearers’ liability. Check the schedule and policy wording for the cover that applies.

The body corporate, owners corporation or other strata entity generally arranges insurance for the building and common property. The exact responsibilities depend on the property, applicable strata legislation and policy wording.

Strata building insurance may exclude tenants’ contents and other property, as well as lot owners’ personal contents. Tenants, businesses and lot owners may need separate contents, landlord or business insurance for property that is not insured by the strata policy.

Water damage may be covered when it results from an insured event, such as liquid escaping from a fixed pipe or other plumbing equipment. Cover depends on the cause of the damage and the policy terms. Wear and tear, corrosion, gradual deterioration, defects or poor maintenance may be excluded. Please carefully review policy terms, limits, conditions and exclusions.

Some policies may cover temporary accommodation or lost rent when insured damage makes a lot or common area unfit for its intended use. Temporary accommodation may only apply to lots occupied for residential purposes. The available benefit, limits and conditions depend on the policy terms, limits, conditions and exclusions.

Factors may include the property’s location, construction, security, sums insured, building condition and insurance or claims history. The percentage of commercial floor space, tenant mix and activities carried out in commercial lots may also affect the premium and terms offered.

A change in tenants, occupancy, commercial activities, floor-space use or building works may affect how the insurer assesses the property. Tell your broker when these details change so the insurer can consider whether the existing terms remain suitable.

Insurers may request the property address, construction details, sums insured, security features and insurance history. They may also ask for the commercial and residential floor-space split, tenant details, commercial activities, building condition, known defects, machinery and commercial cooking information.

Need to make a claim?

  1. Download a claim form here.
  2. Complete all sections of the claim form.
  3. Send your completed claim form to strata@marsh.com.
  4. Marsh will lodge the claim with the insurer and advise on the next steps.

This website contains general information, does not take into account your individual objectives, financial situation or needs and may not suit your personal circumstances.

Marsh Pty Ltd (ABN 86 004 651 512, AFSL 238 983) (“Marsh”) and Marsh Advantage Insurance Pty Ltd (ABN 31 081 358 303, AFSL 238 369) (“MAI”) arrange the general insurance (i.e. not the Discretionary Trust Arrangement) and are not the insurer.

Discretionary Trust Arrangements are issued by the Trustee, JLT Group Services Pty Ltd (ABN 26 004 485 214, AFSL 417 964) (“JGS”). Any advice or dealing in relation to a Discretionary Trust Arrangement is provided by JLT Risk Solutions Pty Ltd (ABN 69 009 098 864, AFSL 226 827) (“JLT”). The cover provided by a Discretionary Trust Arrangement is subject to the Trustee’s discretion and/or the relevant policy terms, conditions and exclusions.

For full details of the terms, conditions and limitations of the covers and before making any decision about whether to acquire a product, refer to the specific policy wordings and/or Product Disclosure Statements (PDSs) available from the relevant product issuer. Target Market Determinations (TMDs) are available here.

Marsh, MAI, JGS and JLT are all businesses of the Marsh group.

LCPA 26/3488