Mixed Commercial-Residential Complex, Ten Units

A body corporate managing a ten-unit mixed-use complex in South-East Queensland was facing a renewal crisis. The two-storey building was built around 2010 with concrete walls, fire-rated cladding, concrete slab flooring, and a metal roof. It housed eight commercial tenancies and two residential units.

The tenancy mix was genuinely diverse: real estate offices, a food franchise, a tobacconist, a dog grooming salon, an accounting practice, a freight logistics office, and two residential apartments. The building sum insured sat at approximately $3.3 million, with loss of rent cover of around $500,000 over 36 months, $10 million in public liability, and additional covers including fidelity guarantee and office bearers' liability.

Despite the building's modern construction and diverse commercial profile, the incumbent insurer declined to provide renewal terms. The body corporate was left without cover and without an obvious path forward.

We approached the market in tiers. We started with mainstream strata underwriters to establish whether any standard insurer would engage, then moved to specialist commercial and AR network channels.

The building's construction profile was a genuine strength. A 2010-build with concrete and fire-rated cladding is exactly what underwriters want to see. The tenancy mix, while diverse, included several low-risk occupancies like professional offices and residential units that should have balanced the overall risk.

We presented the scheme's strengths alongside its challenges, providing full building specifications, tenancy schedules, and claims history to each underwriter. The goal was to find an insurer willing to assess the building holistically rather than declining on the basis of a single tenancy.

When the incumbent insurer declines to re-quote, it sends a signal to the rest of the market. Other mainstream strata underwriters were reluctant to take on a risk that the existing insurer had effectively walked away from.

The tobacconist tenancy was the primary blocker. Despite being a relatively small part of the overall tenancy schedule, it was enough to trigger automatic declines from multiple underwriters. The building's other strengths (modern construction, diverse income stream, strong liability profile) weren't enough to overcome that single occupancy type in the eyes of standard insurers.

This is a pattern we see regularly in commercial strata: a building that should be straightforward to insure becomes difficult or expensive because of one tenancy. The body corporate ends up paying a premium that reflects the worst-case tenancy rather than the building as a whole.

We progressed the risk to a specialist insurer and had formal underwriting submissions in progress. The body corporate ultimately returned to an arrangement with their prior insurer before the specialist process concluded.

For schemes in this situation, the specialist market pathway exists, but it takes time to navigate. The earlier a body corporate engages a broker with access to these markets, the more runway there is to secure competitive terms before the existing policy lapses.

This case reinforced our approach to complex commercial strata: present the full picture, lead with the building's strengths, and persist through specialist channels when mainstream underwriters decline.