Insured for what it costs to rebuild, not what you paid.
Construction costs in the Lower Mainland have moved sharply. A building insured at a figure set a few years ago will not rebuild today, and on a partial loss, being underinsured can reduce what you are paid even when the claim is small.
Have my values checked What is coveredBuilding, tenant improvements, contents, equipment and stock
Owners and tenants of any commercial premises
Your policy schedule and when values were last reviewed
What does commercial property insurance cover?
The physical things your business owns or occupies (the building, your fit-out and improvements, contents and equipment, and stock) against events like fire, water, storm, theft and vandalism. It does not cover wear and tear, gradual damage, or the income you lose while you cannot trade. That last one is business interruption, and it is a separate decision.
If your values were set years ago, the shortfall at claim time is yours to fund out of cash flow. And under a coinsurance clause, being underinsured can reduce what you are paid even on a small partial loss.
What sits inside a property policy.
The building
If you own it. Insured at replacement cost, which should be reviewed as construction prices move.
Tenant’s improvements
If you lease. Everything you installed (walls, flooring, fit-out) is yours to insure, not the landlord’s.
Contents and equipment
Machinery, computers, furniture, tools. Usually the largest number for a tenant business.
Stock
Raw materials and finished goods, valued for the season rather than an average that fits nobody.
Equipment breakdown
Boilers, refrigeration, HVAC and electrical systems failing on their own. No fire policy responds to that.
Property away from premises
Goods in transit, equipment on a client’s site, stock in a third-party warehouse.
Sewer backup and overland water
Separate covers, not automatic, and increasingly relevant in this region.
Earthquake
Optional and a genuine decision on this coast. The deductible is a percentage, so ask what it means in dollars.
Three ways property claims disappoint.
None of these are unusual. All three are found during a review rather than during a claim.
Replacement cost is out of date
Values set years ago. Building costs have risen substantially, and the gap is yours to fund.
Coinsurance
Many policies reduce a partial payout if the sum insured is below a stated percentage of true value. You can be penalised on a small claim for underinsuring.
Actual cash value, not replacement
Some items are settled after depreciation. A ten-year-old roof pays like a ten-year-old roof.
A situation we see.
A sprinkler head fails over a warehouse aisle overnight. The building is fine; the stock beneath it is not. Property pays for the stock, at the value you declared, which is why the declared value matters more than the wording.
The valuation is the whole job.
And it is the part nobody enjoys doing.
Insurers do not set your sums insured. You do, sometimes with a broker who never questioned the number that was carried forward from last year. That is how businesses end up paying premiums for years on a figure that cannot rebuild what they own.
We will ask awkward questions: when was the building last appraised, what is stock worth in your busiest month, and what would it cost to replace your slowest piece of equipment today. It takes longer. It is the only part of this that decides whether a claim works.
What owners and tenants ask us.
Should I insure my building for market value?
No. Insure it for what it would cost to rebuild. In the Lower Mainland much of a property’s market value is land, which does not burn and does not need rebuilding.
I lease my unit. What do I actually have to insure?
Your contents, your equipment, your stock, the improvements you installed, and your liability for damage to the premises. The landlord insures the structure, not your side of it.
What is coinsurance and why does it matter?
It is a clause requiring you to insure to a stated percentage of full value. If you are below it, a partial claim can be reduced proportionally, so underinsuring costs you even on small losses.
Is flooding covered on a commercial policy?
Not automatically. Overland water and sewer backup are separate covers that must be arranged, and availability depends on the location.
How often should values be reviewed?
Every year at renewal, and immediately after any significant purchase, renovation or change in stock levels. Construction costs have moved enough recently that a three-year-old figure is probably wrong.
Does property insurance cover lost income?
No. That is business interruption, a separate cover that responds when insured damage stops you trading.
Own units in a strata building? strata & property managers.
When were your values last reviewed?
Send us the schedule. We will tell you plainly whether the numbers still fit the business.
Property insurance responds to events, not to machines stopping. equipment breakdown covers the difference.