Mixed-Use Property Insurance
Did a standard insurer decline your building because of the business downstairs? We specialise in properties that are part-residential, part-commercial.
✅ "Shop Top" Specialists: Covering buildings with retail/offices on the ground floor and residential flats above.
✅ High Risk Tenants Accepted: Cafes, restaurants, and takeaways are no problem.
✅ One Roof, One Policy: Seamlessly cover the building, loss of rent, and public liability for both commercial and residential zones.
✅High Value Assets: Access to Industrial Special Risks (ISR) markets for properties valued over $5M.
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What Does Mixed-Use Property Insurance Mean?
Mixed-Use Property Insurance is a specialised policy centered on Commercial Property Coverage, designed to protect properties with both residential and commercial uses.
Picture a cafe with modern flats above it or a retail store with a rental unit out back. These properties don’t neatly fit into standard Home or Business Insurance policies, so they need a specialised approach to cover their unique risks.
This type of insurance protects the building itself, the businesses operating within it and sometimes even the residential tenants, depending on the policy.
Why Mixed-Use Properties Need Specialised Insurance
Standard Home or Business Insurance often falls short for mixed-use properties.
Here’s why Mixed-Use Property Insurance is essential:
01
Diverse Risks: Commercial spaces face risks, such as customer injuries or equipment damage, while residential areas deal with tenant issues or personal property loss. A mixed-use policy can cover both.
02
Complex Liabilities: If a customer slips in your shop or a tenant’s unit floods, you could face claims from multiple parties. This insurance helps manage those liabilities.
03
Property Value Protection: Sydney’s property market is competitive. A fire, flood or storm could damage your asset and this insurance can help cover repair or rebuilding costs.
04
Legal Requirements: Some leases or local regulations may require specific coverage for commercial spaces, especially in busy areas.
What Does It Cover?
Here’s what it can cover:
01
Building and Contents: Covers the physical structure (walls, roof, etc.) and contents like shop fixtures, appliances or tenant belongings (if included).
02
Public Liability: Protects against claims if someone is injured or their property is damaged on your premises, say, a customer tripping in your store.
03
Loss of Rent: If a fire or storm makes your property unusable, this can cover lost rental income from tenants or commercial leases.
03
Business Interruption: Helps replace lost income if your commercial tenant (or your own business) can’t operate due to covered damage.
03
Natural Disasters: Storms and floods are real risks. Most policies cover these, though you’ll need to check for flood-specific terms as some areas or regions are high-risk.
03
Optional Add-Ons: Depending on your needs, you can add coverage for things like glass breakage, theft or equipment breakdown.
Key Considerations for Mixed-Use Property Owners
Before choosing a Mixed-Use Property Insurance policy, here are some practical things to think about:
01
Location Matters: Coastal and urban areas face different risks.
02
Tenant Types: The businesses in your property (e.g., a cafe vs. an office) affect your risk profile. High-traffic businesses, such as restaurants, may increase your premiums.
03
Building Age and Condition: Older buildings might need extra coverage for structural issues or heritage requirements.
03
Policy Exclusions: Always read the fine print. Some policies exclude certain events (e.g., floods or tenant damage) unless you add them.
03
Valuation: Ensure your property is insured for its full replacement value.
Frequently asked questions
Do my tenants need their own insurance, or does my Mixed-Use policy cover them?
Your tenants must hold their own policies; your Mixed-Use Insurance is designed to cover your liability and asset, not theirs. While your policy covers the building structure and your liability as the landlord, it creates a "coverage gap" regarding the tenant's operations and belongings.
- Residential Tenants: Should hold Contents Insurance for their personal possessions.
- Commercial Tenants: Must hold Public Liability and Glass/Plate Glass Insurance (often required by the lease).
What are the key exclusions in a Mixed-Use Property Insurance policy?
Beyond standard exclusions like wear and tear, Mixed-Use policies have specific caveats regarding occupancy and commercial activities. Because you are insuring two different risk types under one roof, you must be aware of:
- Unapproved Commercial Activities: If your ground-floor tenant changes from a low-risk retailer (e.g., a florist) to a high-risk operator (e.g., a takeaway shop with a deep fryer) without you notifying the insurer, your entire policy could be voided.
- Vacancy Periods: Commercial vacancy clauses are often stricter than residential ones. If the shop is empty for an extended period, cover may be restricted. Always check your PDS as the specific number of days allowed varies by insurer.
- Flood vs. Water Damage: In Australia, "Flood" (rising water from a watercourse) is distinct from "Escape of Liquid" (burst pipes). Ensure you check if Flood Cover is an optional add-on in your Product Disclosure Statement (PDS)
Important: Always refer to the specific Product Disclosure Statement (PDS) for full terms. We can help you compare PDS wordings to find the right fit.
Does Mixed-Use Insurance cover "Loss of Rent" if the building is damaged?
Yes, but it typically functions differently for the commercial vs. the residential portion of your building.
- Residential Component: Usually covers "Loss of Rent" if the apartment is uninhabitable due to an insured event (like a fire or storm)
- Commercial Component: Requires Business Interruption or specific "Loss of Rent/Rent Default" coverage. This protects your income stream if the commercial tenant cannot operate (and therefore cannot pay rent) due to damage.
What if my property is high-value (e.g. over $5M) or has "hard-to-place" risks?
You will likely require an Industrial Special Risks (ISR) policy rather than a standard commercial pack.
Standard "Business Packs" often have strict limits on Total Sum Insured (commonly capped around $5M, though this varies) and Risk Appetite. If your property exceeds these value limits, or if standard insurers decline coverage due to the nature of the tenants or construction (e.g., high-risk manufacturing or heritage listings), an ISR policy is the solution.
Why an ISR? An ISR policy is designed for larger or more complex assets. It generally offers broader coverage and higher limits where standard market policies cannot compete.
Access to Specialised Markets: We have access to niche underwriting agencies that specialise in these high-value and complex risks, including (but not limited to):
- Pen Underwriting
- AXIS Underwriting
- Ocean Underwriting
- One Underwriting
- The Barn Underwriting
Critical Note on Liability: Unlike a standard "Business Pack," an ISR policy usually does not include Public Liability or Property Owners Liability. This must be purchased as a separate standalone policy. As your broker, we ensure both your asset (ISR) and your liability are seamlessly covered.