COMMERCIAL PROPERTY CASE STUDY
Commercial Strata Centre with Difficult Tenancy, QLD
The previous insurer hiked the premium and tripled the excess because of one tenant. Six underwriters declined. Here's how we resolved it.
THE SITUATION
A small commercial strata centre in coastal Queensland with five units and multiple tenants contacted us after their existing insurer dramatically increased the premium and excess at renewal.
The cause was a single difficult tenancy - a tobacconist. Tobacconist tenancies are an occupancy type that often sits outside standard underwriter appetite in commercial property. The fire risk profile and stock value mean many underwriters either decline to offer terms or load premiums heavily.
The incumbent insurer had increased the premium by over 60% and bumped the excess from $2,000 to $20,000 - solely because of that one tenant. That was the trigger for the owners to look for alternatives.
OUR APPROACH
We went to market systematically, submitting the risk across mainstream and specialist commercial underwriters. Each submission included the full tenancy schedule, building details, and fire protection information.
In parallel, we worked with the body corporate to address the underlying issue. The tobacconist tenant's lease was coming up for renewal, and there was an opportunity to resolve the tenancy rather than just accept the market's pricing.
THE CHALLENGES
Six underwriters declined to quote. Some cited the tobacconist directly. One required evidence the tobacconist lease was being terminated before they'd even consider the risk.
The previous insurer's renewal terms were the only fallback - and the $20,000 excess on a small shopping centre was disproportionate to the risk once the difficult tenancy was addressed.
THE OUTCOME
After the difficult tenancy was resolved and the tenant vacated, we re-approached the market with an updated tenancy schedule.
We placed cover at around $6,100 with a $2,000 excess. The premium dropped back to where it should have been, and the excess returned to a standard level - down from $20,000.
This case shows that sometimes the solution isn't just finding the right insurer. It's helping the property owner address the underlying risk factor. Once the tobacconist tenancy was resolved, the building became a straightforward commercial strata risk again.
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Read case studyDifficult Tenant Affecting Your Insurance?
A single tenancy that sits outside standard insurer appetite can affect the entire building's insurance. We can help you navigate the options - whether that's finding an insurer with appetite, or advising on how to address the underlying risk.