Reviewed by licensed advisers at Smiths Insurance & KiwiSaver (FSP712931) · Updated 11 November 2026

Commercial Property Insurance NZ: Buildings, Fit-Out and Contents

Commercial property insurance pays to repair or replace business premises and what is inside them after an insured event such as fire, storm, water damage or theft. In New Zealand it can cover the building (if you own it), your fit-out, plant, stock and contents. Who insures which part usually comes from your lease or title, not from a rule of thumb, so read the clause first.

In short

Owners insure the building. Tenants usually insure their own fit-out, stock and contents, and the lease says who covers the rest.
The sum insured is the figure that matters most. If it is too low, a claim may be paid at a reduced amount.
Property cover repairs the premises. Lost income while you cannot trade sits under business interruption insurance.

What leases and lenders ask tenants and owners for

A minimum cover amount named in the lease
A named party on the policy
A current certificate of currency
The tenant to insure their own fit-out, stock and contents

Fire, storm or water damage

Property cover repairs the premises. Lost income is a separate cover.

A sum insured set too low

Some policies pay a claim at a reduced proportion.

Fit-out the landlord does not cover

A landlord policy generally covers the building, not what is yours.

A visitor hurt or goods damaged

Damage to a neighbour or visitor is a liability claim, not property.

Work out what to raise

Tick what applies to you

I own the building
The owner usually insures the structure.
Covers to raise: Premises, stock and interruption
I lease the premises
The lease says who insures what.
Covers to raise: Premises, stock and interruption, Public liability
I paid for the fit-out
A landlord's policy generally covers the building, not what is yours.
Covers to raise: Premises, stock and interruption
I hold stock or contents
Covers to raise: Premises, stock and interruption
I have plant or equipment on site
Covers to raise: Premises, stock and interruption, Tools and equipment
I would lose income straight away if I could not trade
Covers to raise: Premises, stock and interruption
My lease or lender names a cover amount
Covers to raise: Public liability, Premises, stock and interruption
Customers or visitors come onto the premises
Covers to raise: Public liability
I hold customer data
Covers to raise: Cyber

What these covers do not pay

Wear and tear, gradual damage and poor maintenance.
Fixing defective design or workmanship in the building itself.
Lost income, unless you also hold business interruption cover.
Damage to a neighbour's property. That is a liability claim, not a property claim.
Health and safety fines, which can never be insured (Health and Safety at Work Act 2015, s 29).

General information only. Whether a cover responds depends on the policy wording.

Which clause is in your contract?

Interested party noted
The client, head contractor or financier asks to be named on your policy so they are told about changes such as cancellation. Wording varies, and in some contracts it means something different from being an extra insured.
Covers to raise: Public liability, Contract works
What it does not decide: Being noted does not by itself give that party cover under your policy or a right to claim. That depends on how the insurer words it.
Waiver of subrogation
Subrogation is an insurer's right to recover a claim from whoever caused the loss. A waiver gives up that right against a named party, such as the client.
Covers to raise: Public liability, Contract works, Premises, stock and interruption
What it does not decide: It does not decide whether your insurer agrees to the waiver. Some policies need it endorsed in advance, and giving it up without telling the insurer can affect a claim.
Hold harmless
You agree to cover the other party's losses or claims connected to your work, sometimes including claims caused by their own actions. It is also called an indemnity clause.
Covers to raise: Public liability, Professional indemnity
What it does not decide: It does not decide whether your insurer will pay liability you took on only by contract. Many policies limit or exclude contractually assumed liability, so the wording matters.

General information, not legal advice. The full clause and the policy wording decide how it applies.

Check your certificate of currency against the contract

Check the insured name, limit and dates match the contract. The policy wording, not the certificate, decides what is covered. How a certificate of currency works

What each cover may pay, and what it usually does not

Premises, stock and interruption
May respond to
Repair or replacement of the building, fit-out, plant and stock, and lost income if you also hold business interruption.
Common trigger
Fire, storm, water damage or theft.
Usually not covered
Wear and tear, defective workmanship, and a claim reduced if the sum insured is too low.
Public liability
May respond to
A visitor hurt or a neighbour's property damaged, plus legal defence costs.
Common trigger
An incident at or near the premises.
Usually not covered
Damage to your own premises or stock.
Cyber
May respond to
Costs after a breach of customer data or a payment fraud, depending on the wording.
Common trigger
A phishing email, ransomware or lost customer records.
Usually not covered
Physical damage to equipment and upgrades to your systems.
Business vehicles
May respond to
Damage to vehicles used for the business and liability to others.
Common trigger
A crash or theft while a vehicle is on business use.
Usually not covered
Vehicles outside what the policy describes, and goods in transit unless added.

If something goes wrong

A burst pipe overnight
A pipe bursts in a tenant's shop after hours and damages the fit-out, the carpet and the stock.
May respond: Premises, stock and interruption
Have ready
- Photos before any clean-up
- The lease clause on who insures the fit-out
- A stock list and supplier invoices
- The plumber's report
A fire next door
A fire in a neighbouring unit spreads and the business cannot trade for several weeks.
May respond: Premises, stock and interruption
Have ready
- Last year's accounts and recent sales
- The fire service or insurer reference
- Photos and a list of damaged items
- Wage records for the period
A customer slips in the entrance
A visitor slips on a wet floor and says their phone and clothing were damaged.
May respond: Public liability
Have ready
- Photos of the floor and signage
- The incident report
- Contact details for the visitor and any witnesses
- The lease clause naming a cover amount, if any
A building left empty
An owner's building sits vacant between tenants and is damaged by a storm.
May respond: Premises, stock and interruption
Have ready
- The policy wording on unoccupied premises
- The date the last tenant left
- Maintenance and inspection records
- Photos of the damage

Typical examples, not real claims. ACC deals with most injuries, so an injury claim is mostly about property and legal costs. Whether a claim is paid depends on the policy wording and the facts.

What it covers

A policy is built from parts, and you choose which apply:

Buildings. The structure, permanent fixtures and often outbuildings and signage. Relevant to owners.
Fit-out and improvements. Partitions, floor coverings, counters, kitchens and lighting you installed. The lease may require tenants to insure these.
Plant and equipment. Ovens, shelving, computers and items that stay on site. Portable tools that leave the premises usually need tool insurance.
Stock and contents. Goods you sell or use, and the furniture of a working office or shop.
Glass, signage, theft and malicious damage. Often extensions, sometimes with conditions such as locks or alarms.

Insured events differ between policies. Read the list, and ask what is standard wording and what is an extension.

Landlord or tenant: who insures what?

You own and occupy. You insure the building, your fit-out, stock and contents.
You own and lease it out. You insure the building. The tenant insures their own contents. Some owners also cover rent lost if the building cannot be used.
You lease it. The lease says who insures the building and whether you reimburse the landlord through outgoings. You usually insure your own fit-out, stock and contents.

Tenants running a shop or cafe will find the stock and fit-out side on those pages. Leases often also ask for liability cover and a current certificate: see public liability insurance and the certificate of currency guide. If the lease names a minimum amount or a named party, send the clause to your adviser before you buy.

In a unit title development, the body corporate must insure and keep insured all buildings and other improvements on the base land to their full insurable value (Unit Titles Act 2010, s 135). Ask for its current insurance details and check what is left for you.

How the sum insured is set

The sum insured is the most the insurer will pay on that item, and it is where policies most often fall short.

Replacement basis. Many policies are written on the cost to rebuild or replace. Others pay market value or a depreciated amount. The schedule should say which.
Rebuild cost is not market value. A sale price includes land and location. Rebuild cost depends on materials, labour, demolition, fees and what the current Building Code would require. Owners often use a valuer or quantity surveyor.
Underinsurance. Some policies reduce a claim in proportion if the sum insured is too low. Ask whether yours does.
Review it each year. New fit-out and added stock change the number.

Natural hazards

The Natural Hazards Commission Toka Tū Ake describes itself as providing insurance to residential property owners, so do not assume a government scheme sits behind a shop, office or warehouse. Commercial natural hazard terms (earthquake, flood, landslip) are in your private wording. Ask your adviser to point out that wording and any separate excess.

What it usually excludes

Wear and tear, gradual damage and poor maintenance.
Defective design or workmanship. Fixing the faulty work itself is typically excluded.
Unoccupied premises. Many policies restrict cover after a building has been empty for a set period.
Existing damage and lost income. Lost income needs business interruption cover.
Fines. Health and safety fines can never be insured (Health and Safety at Work Act 2015, s 29).
Liability to others. Damage to a neighbour's property is a liability claim, not a property claim.

One part of a package

A shop or office usually also needs public liability, business interruption, cyber insurance if you hold customer data, and business vehicle insurance. The business insurance guide shows how they fit together. For the people behind the business, see owner protection.

How we help

A Smiths adviser will phone you to talk through which covers to look at. Some business covers we refer to another licensed Financial Advice Provider, and we will tell you who, and how they are paid, before your details go to that firm. That firm may charge fees. Smiths Insurance & KiwiSaver may receive a commission or referral payment if you buy. Cover and price depend on insurer underwriting and the policy wording. Financial advice is provided by Craig Smith Business Services Limited, trading as Smiths Insurance & KiwiSaver, a licensed Financial Advice Provider (FSP712931).

Have ready: the address, construction type and age, what the building is used for, whether you own or lease, the values you want covered, security and fire protection, and your claims history. To talk it through, use the form at the top of this page.

Frequently Asked Questions

Is commercial property insurance a legal requirement in New Zealand?

We have not found a general law that requires every business to insure its premises. In practice, leases, lenders and body corporate rules often do, so read yours.

Is my fit-out covered under the landlord's policy?

Often not. A landlord's policy generally covers the building. Check who owns the fit-out under the lease and insure what is yours.

What is the difference between commercial property and business interruption insurance?

Property cover pays to repair or replace damaged premises and contents. Business interruption covers lost income while you cannot trade.

What happens if my building is underinsured?

Some policies pay a claim at a reduced proportion when the sum insured is below the true value, and a large loss could exceed the limit. Ask your adviser how your policy treats this.

References

Related industries

Protect the people behind the business

Liability cover protects the business from claims. If you or a business partner could not work, or died, key person and shareholder cover can help keep the business, and your family, going.

Key person cover, if the business relies on you
Shareholder cover, so partners can buy each other out
Income protection for owners and the self-employed

Check your sum insured before you need it

A licensed Smiths adviser phones you and asks whether you own or lease the premises, what your lease says about insurance, and what you want covered. If we refer you to another licensed firm, we tell you who first. Smiths Insurance & KiwiSaver may receive a commission or referral payment if you buy.

A licensed Smiths adviser phones you. If we refer you to another licensed firm we tell you who first and how they are paid.

Read the full insurance guides

Tell us how the business trades and a Smiths adviser will phone you to talk through which covers to look at. Check what cover you need. No cost to talk it through.