COMMERCIAL PROPERTY INSURANCE CASE STUDY
1975 Commercial Building With a Fitness Centre Tenant, Four Quotes More Than $16,000 Apart
The owner asked for alternatives to the incumbent at renewal. Ten insurers were approached. Five declined, one referred, four quoted, and the spread between the cheapest and the dearest was more than double.
THE SITUATION
The owner of a commercial building on the NSW South Coast emailed Tank Insurance ahead of its renewal seeking alternatives to the incumbent insurer. The building was built in 1975 with iron and aluminium external walls, concrete and brick floors and a metal roof, no sprinklers, locks and swipe cards with a local alarm, and no residential use. It was a multi-tenancy retail building whose principal occupant was a supervised fitness centre operating in business hours.
The owner wanted building, business interruption and liability cover quoted as a package.
OUR APPROACH
- Ten insurers with business pack appetite for commercial property were approached on the same submission.
- Five declined to quote. One referred the risk for review.
- Four quoted: approximately $14,100, $19,800, $28,000 and $30,300 for comparable building, business interruption and liability cover.
THE CHALLENGES
A 1975 building with metal external walls and no sprinklers, with a gym as the principal tenant, sits at the edge of business pack appetite. That is why half of the insurers approached declined. The four that quoted priced the same facts very differently.
THE OUTCOME
The building was placed with Miramar Underwriting at a premium of approximately $14,100 a year for building, business interruption and liability, against the highest quote of around $30,300 for the same cover.
Final Solution: A 1975 commercial building with a fitness centre tenant placed at around $14,100 a year, with the market spread documented for the owner.
This case records one historical outcome; current insurer appetite, premium, timing and terms depend on the complete risk at the time of application.
For the wider buying context, see our commercial property insurance brokers page and the declined commercial property guide.
COMMERCIAL LANDLORD QUESTIONS
What this placement answers for other commercial building owners
How much does insurance cost for a commercial building with a gym tenant?
Why did five of ten insurers decline an occupied commercial building?
Should a commercial landlord remarket at every renewal?
COMMERCIAL PROPERTY INSURANCE
Put this placement in context
Case-study results are historical and are not a promise of current pricing, capacity or policy terms. This page is general information only and does not take account of your objectives, financial situation or needs.
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