The short answer
Commercial property insurance pays to repair or replace buildings, fixtures, equipment and stock after a covered loss such as fire, water damage or theft. Owners insure the building itself; tenants usually insure contents and improvements they have made. A licensed broker sets the values, chooses the perils covered and checks the lease or mortgage for requirements.
- Owners of offices, warehouses, retail units, industrial buildings or mixed-use properties
- Landlords who lease space to commercial tenants
- Tenants whose lease makes them responsible for improvements and contents
- Buyers closing on a commercial building who need cover in place before possession
- Owners who renovated, added space or changed the use of a building
2 licensed brokers in the network handle this. In Alberta, Canada, a request for commercial property insurance can be offered to up to three of them, chosen because they are licensed for this line and place. They are test brokers while we are in demo.
See the brokers → Outside Alberta, Canada you can prepare and save a request today; sending opens place by place. Brokers answer with their own quotes. Broker.insure does not quote, advise or take commission.
01 / What it covers
The parts worth understanding
Building
The structure, permanent fixtures and sometimes outbuildings, signs and fences. The key decision is whether the limit is based on replacement cost or on a depreciated value.
Contents, stock and equipment
What sits inside: furniture, machinery, inventory and tools. Stock that rises and falls with the season may need a limit that adjusts.
Tenant improvements
Walls, flooring and fit-out a tenant paid for. Leases differ on who owns them, which decides who insures them.
Named perils or all risks
A named-perils form pays only for listed causes; an all-risks form pays for any cause not excluded. Flood, earthquake and sewer backup are commonly treated separately.
Rental income and extra expense
Rent a landlord loses or costs the owner pays to keep operating after a covered loss. It is often an add-on rather than part of the base form.
Vacancy and unoccupied conditions
Many policies limit or suspend certain cover when a building sits empty past a set period. Ask what counts as vacant before an extended gap between tenants.
02 / Get ready
Bring this, and expect these questions
Gather
- Address, year built and the main construction type: wood frame, masonry, steel or a mix
- Square footage by floor, number of storeys and any basement or mezzanine
- Dates of major updates to the roof, wiring, plumbing and heating
- How each unit is used and by whom, including any hazardous processes
- Fire protections: sprinklers, alarms, monitoring and distance to the hydrant and fire hall
- Recent appraisal, replacement cost estimate or purchase documents
- A list of tenants, their trades and the insurance clauses in each lease
- Mortgage or lender requirements, including named mortgagee wording
- Loss history on the property for the past several years, including claims by earlier owners
A broker will ask
- Do you own the building, lease it, or both, and who is responsible for the roof and structure?
- What would it cost to rebuild, not what you paid for it or what it would sell for?
- Who occupies the building and what do they do there?
- Are any units empty or likely to be empty for a stretch?
- Have you had water damage, fire or theft before, and what was fixed afterward?
- Are there mortgages or lenders who must be named on the policy?
- Is any part of the building heritage-designated or subject to special rebuild rules?
- Do you want cover for lost rent or extra expenses after a loss?
Not sure of an answer? Leave it. "Not known yet" is a fine answer, and a broker will help you fill it in.
03 / Build your request
Answer a few questions. Get your own list.
Pick what fits. Your answers shape the list beside them, and they are saved to your request as plain facts a broker can read. "Not sure yet" is always a fine answer.
04 / Three situations
See which one sounds like yours
A landlord with a small strip of shops
Four retail units sit under one roof; one tenant is a restaurant with a fryer, another has been vacant since spring. The owner just refinanced and the lender wants the policy wording reviewed.
First steps. Send the broker the lender's insurance requirements and the lease clauses for each tenant. Ask how the vacant unit is treated and whether the restaurant's cooking exposure changes the building's terms.
A tenant who finished out a new office
A design studio paid for glass partitions, flooring and a kitchen in leased space. The lease says the tenant must insure improvements, but nobody is clear on who owns them if the building is damaged.
First steps. Gather receipts for the fit-out and the exact lease wording on improvements and repairs. Ask the broker how to separate improvements from equipment on the policy, and whether the landlord's coverage affects what the studio needs.
An owner closing on a small industrial building
A machine shop owner is buying the building it has rented for ten years, with possession in three weeks. The seller's appraisal is out of date and the roof was patched recently.
First steps. Ask for the building's inspection report and any roof invoices to share with the broker now, not at closing. Request a replacement cost estimate separate from the purchase price, and confirm the policy start date matches the day risk passes to you.
05 / Words you will hear
The jargon, in plain words
- Replacement cost
- The expense of rebuilding the structure with similar materials and finish, not the market price of the property. Land value is left out, so it differs from what the building would sell for.
- Coinsurance
- A clause that cuts a claim payment if the amount insured is too low compared with the full value required. It rewards accurate valuations and penalizes underinsurance.
- Vacancy clause
- A condition that limits or suspends some cover when a building has been empty beyond a set number of days. Planned vacancies are best raised before they begin.
- Tenant improvements
- Upgrades a tenant installs, such as flooring or partitions. The lease decides whether the landlord or tenant insures them, and gaps appear when neither does.
- Bylaw upgrade cover
- Extra payment toward bringing repaired parts of a building up to current codes after a loss. Without it, code upgrades can fall on the owner.
06 / Common mistakes
What trips people up
- Insuring for the purchase price, which includes land and market value, instead of what it costs to rebuild.
- Assuming the landlord's policy protects a tenant's contents or improvements.
- Forgetting to tell the insurer about vacancy, a change of tenant or a new kind of activity in the building.
- Leaving out flood, sewer backup or earthquake because they are not in the base form, without asking whether they can be added.
- Not checking whether the limit reflects current construction costs after a renovation or inflation.
- Missing the lender's wording, which can hold up a closing or a refinancing.
Ready when you are
Turn this into one clear request.
Save it, add what you know, and choose when to send it. A licensed broker who handles commercial property insurance takes it from there.
07 / Questions people ask
Straight answers
What does commercial property insurance cover?
It covers physical loss to buildings, fixtures, equipment and stock from the causes the policy names or does not exclude, such as fire, wind, theft or water escape. What is included, how much will be paid and which causes are left out depend on the form, so ask your broker to explain the exclusions as clearly as the coverage.
What is the difference between replacement cost and actual cash value?
Replacement cost pays what it takes to repair or replace the item with similar new materials. Actual cash value pays that amount less depreciation for age and wear. The difference can be large on an older building or equipment, so check which basis your policy uses before a loss, not after.
Do tenants need commercial property insurance?
Usually yes, for what the tenant owns or must insure under the lease: contents, equipment and improvements. The landlord normally insures the building itself. Leases vary, so read the insurance and repair clauses and give them to your broker so the cover matches the lease, and any certificate required can be issued.
Is flood covered by commercial property insurance?
Not always. Flood, overland water, sewer backup and earthquake are often excluded from a basic form and offered as separate options, sometimes with limits or waiting periods. Availability depends on the location and the insurer. Ask your broker directly which water events are covered for your building and which are not.
What happens to my cover if the building is empty?
Many policies reduce or suspend certain protections once a building has been vacant or unoccupied for a set period, and the definitions vary. Tell your broker in advance about any planned gap between tenants or during renovations, so they can arrange terms that suit the situation rather than finding out at claim time.
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General information, not insurance advice. Broker.insure is a directory and request service: it is not an insurer and does not quote, bind or advise. Policy terms, availability and what is required where you live depend on your situation and on licensed professionals. Updated 2026-10-31.