Frequently asked questions – Commercial real estate building insurance
What exactly does building insurance for commercial real estate cover?
The building insurance covers damage to it building itself (shell), such as walls, floors, roof and fixed installations (e.g. central heating, lifts, solar panels). Individual matters such as inventory, goods and tenant interest are not included as standard under buildings and must be insured separately.
What is the difference between buildings, inventory/goods and business interruption?
buildings = the building; inventory/goods = furnishings, machines and trading stock; Business damage = compensation for loss of turnover/profit and fixed costs after covered material damage. These coverages are additional on each other.
Is payment made on the basis of rebuilding value or new value?
Business building coverage usually works with rebuilding value (cost to rebuild equivalent). A valuation whether valuation helps prevent underinsurance; There is often an index clause present, but correct sum determination remains important.
How do I prevent underinsurance?
Periodically let a valuation carry out or use an approved one value methodology. Record extensions (such as extensions, solar panels, charging stations, cold stores) and adjust them sum insured immediately in case of renovations or changes in function.
Are solar panels, charging stations and installations included in the insurance?
Fixed installations on/on the property (e.g. PV panels, inverters, charging stations, heat pumps) usually fall under buildings. Do check prevention requirements (inspections, installation, fire alarm system) and state the value explicitly.
Does the policy cover vacancy, renovation or (sub)letting?
Vacancy, (re)construction and (sub)letting are risk-increasing and common reporting obligation. Conditions and premium may change or additional prevention requirements apply. Always report changes in a timely manner to avoid coverage gaps.
What about water damage, storm damage and glass?
Damage due to storm, fire, lightning and pipe leakage is usually covered. Glass can be part of or be insured as an option. For precipitation/indoor water damage specific conditions often apply (including maintenance and disposal).
Is flood damage covered?
Primary flooding is often excluded. For secondary flooding or precipitation damage limited coverages whether additional solutions exist. Discuss location-specific risks (water map) for appropriate advice.
Are tenant interests covered by buildings insurance?
tenant interest (improvements made by tenant) usually falls not automatically under the owner's building. This can be insured with the tenant or via an additional section. Agree how this is arranged contractually.
What prevention and inspection requirements apply?
Depending on use and value, requirements may apply fire and burglary protection, electrical inspections, roof inspections, compartmentalization, hot-work procedures and maintenance contracts. Compliance is crucial for acceptance and benefits.
Do I also need business interruption insurance?
Yes, when failure of the building leads to loss of turnover or additional costs. The business interruption insurance reimburses fixed costs/loss of profit after covered material damage to buildings or inventory. Choose a suitable one benefit period (e.g. 26–52–104 weeks).
When do I have to report changes?
Always there renovation, destination change, new tenants, Vacancy, extension (extension/installations) or risk increasing activities. This way the coverage remains current and you prevent surprises in the event of damage.
Please note: exact coverage and conditions vary per insurer. We are happy to provide tailor-made advice and comparisons.
