Commercial property insurance is a must-have for business owners in Australia, protecting assets from damage caused by fire, theft, storms, and more. But let’s be honest—when it comes to filing a claim, things can get complicated. Delays, disputes, and underinsurance can make the process stressful.
So, how do you successfully navigate complex insurance claims? Let’s break it down step by step.
Common Types of Commercial Property Insurance Claims
Understanding what types of claims are most common in Australia helps in preparing for potential risks. Here are the big ones:
Fire and Smoke Damage
- Bushfires are a major threat in Australia, with 24 million hectares burned during the 2019-2020 Black Summer fires.
- Internal fires caused by electrical faults or equipment failures are also common.
Water Damage (Floods, Burst Pipes, Storms)
- Australia faces frequent flooding, especially in Queensland and New South Wales. The 2022 floods resulted in over $5.65 billion in insurance claims.
- Storm damage, including roof leaks and water ingress, is another common claim.
Theft and Vandalism
- Business theft and vandalism cost Australian businesses millions yearly, with retail stores and warehouses being prime targets.
Business Interruption Losses
- Many businesses struggle with claims for lost revenue due to insured damages.
- COVID-19 led to a surge in claims disputes over business interruption insurance.
Natural Disasters (Bushfires, Cyclones, Earthquakes)
- Cyclones in Northern Australia cause extensive property damage annually.
- Earthquakes, while less common, can still cause significant losses, like the 5.9 magnitude quake in Victoria (2021).
Structural Damage (Wear & Tear vs. Insurable Events)
- Claims often get rejected when insurers argue the damage is due to “lack of maintenance” rather than an insurable event.
Key Challenges in Commercial Property Insurance Claims
Understanding Policy Inclusions & Exclusions
- Not all damages are covered, and businesses often find out too late.
- Flood damage, for instance, might not be included in a standard policy.
Underinsurance and Its Impact on Claims
- Over 40% of Australian businesses are underinsured, leading to reduced payouts.
- If your property is worth $2 million but insured for $1.5 million, you may only receive a fraction of your claim.
Delays in Processing Claims
- Some claims take months due to investigations, assessments, and insurer backlogs.
Disputes Over Damage Assessment and Coverage
- Insurers and policyholders often clash over repair costs and scope of coverage.
- Disputes can delay claim settlements or even result in outright denials.
Compliance with Building Codes and Regulations
- If your building doesn’t meet updated Australian building codes, insurers might not cover the full repair costs.
Step-by-Step Guide to Filing a Commercial Property Insurance Claim
Immediate Steps After an Incident
- Ensure safety first—secure the premises and prevent further damage.
- Notify the police if theft or vandalism is involved.
Documenting Damage for a Strong Claim
- Take high-quality photos and videos of all damages.
- Keep an inventory of affected business assets.
- Collect witness statements if available.
Notifying Your Insurance Provider
- File a claim as soon as possible—many insurers have deadlines.
- Provide a detailed claim report with all evidence.
Engaging Loss Assessors and Adjusters
- Insurers will send their own assessors to evaluate damage.
- You can hire an independent loss assessor for a second opinion.
Understanding the Claim Settlement Process
- Insurers may offer cash settlements or arrange repairs directly.
- Ensure the settlement covers full repair/replacement costs.
How to Maximise Your Commercial Property Insurance Payout
Keeping Up-to-Date Valuations of Business Assets
- Regularly update insurance policies to reflect current property values.
Maintaining Detailed Business Records
- Keep copies of purchase invoices, lease agreements, and maintenance records.
Working with Insurance Brokers and Legal Experts
- A good broker can help negotiate better settlements.
Avoiding Common Claim Mistakes
- Failing to read policy fine print.
- Delaying claims submission.
- Not keeping proper documentation.
Role of Insurance Brokers in Complex Commercial Claims
How Brokers Help Navigate the Claims Process
- They understand policy jargon and can negotiate better outcomes.
Advocacy and Negotiation with Insurers
- Brokers act as intermediaries to speed up claim settlements.
Ensuring Full Policy Entitlements Are Met
- Brokers ensure you get the maximum payout for your claim.
Handling Insurance Claim Disputes and Rejections
Common Reasons for Claim Denials
- Damage classified as ‘wear and tear.’
- Policy exclusions overlooked by policyholders.
- Insufficient documentation.
Appealing a Denied Claim
- Request a detailed explanation from the insurer.
- Provide additional evidence or expert reports.
Engaging an Insurance Dispute Resolution Service (AFCA)
- The Australian Financial Complaints Authority (AFCA) resolves disputes between businesses and insurers.
- Over $248 million was awarded to consumers through AFCA rulings in 2022.
Seeking Legal Advice for Large-Scale Losses
- In cases of significant claim disputes, a legal expert can help challenge insurer decisions.
Business Continuity Planning and Risk Mitigation
Importance of Having a Risk Management Strategy
- A well-planned risk strategy helps in faster claims processing.
Regular Policy Reviews to Ensure Adequate Coverage
- Policy terms and business needs change—review coverage yearly.
Disaster Preparedness and Emergency Response Plans
- Have a clear plan for evacuations, backups, and alternative business operations.
Future Trends in Commercial Property Insurance Claims in Australia
Impact of Climate Change on Insurance Policies
- Insurers are adjusting premiums and exclusions due to increased extreme weather events.
Changes in Regulatory Frameworks for Property Claims
- The government is pushing for fairer insurance claim processing.
Advancements in Technology for Claims Processing
- AI and blockchain are improving transparency and claim speeds.
Conclusion
Navigating a commercial property insurance claim can be a minefield, but with the right preparation and expert guidance, businesses can ensure fair settlements.
For tailored insurance solutions and expert claim support, contact SUREWiSE, one of South Australia’s leading insurance brokerages. Whether it’s commercial property insurance, complex insurance claims, or claims dispute resolution, we’re here to protect your business every step of the way.
