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CONTACT Paragon 


Phone: 0487272466


Postal Address: PO Box 317 Budgewoi NSW 2262

18 Perouse Ave
San Remo, NSW, 2262



Insurance designed for Commercial Property Owners -That's what we like to hear

Kerri Day


Purchasing a commercial property to lease can be a great investment. Protecting your investment income can be easy when you know how. Sometimes there can be some questions around the different between Loss of Rent and Rent Default.


Lets check out Loss of Rent

Loss of Rent cover provides protection if there is a claim on the building policy and the building cannot be tenanted due to damage. A good example of this would be if there was a fire and the building was significantly damaged your tenants might have to relocate to continue trading. In this instance you potentially would not be getting rent during the time the building is being repaired. As a commercial property owner odds are you purchased the building as a personal or company investment or perhaps through your superannuation fund. The income lost in this situation would be significant and it is right about now you are extremely pleased you made sure Loss of Rent was included in your insurance policy.

Phew …… you can now breath easy, as your investment is not losing money while necessary repairs are carried out to restore your building to its former glory. You will have new tenants occupying the premises in no time.


“ Tip: Make sure if the rent goes up you let your broker or

insurer know to avoid being underinsured”


Lets get better acquainted with Rent Default Cover

You are probably thinking to yourself “But what if, no matter how perfect the tenants seemed when signing the lease, they stop paying their rent mid lease? No warning, just up and leave”. Short answer is you can get an optional benefit on certain insurance policies to recover some of those costs. This is usually referred to as Rent Default Cover and it can provide a financial buffer while your managing agent is working their magic doing what is necessary to have your property occupied with paying tenants as soon as practical.


Consider this – you have had your commercial property occupied by the same reliable tenant for two and a half years when, without warning, they have vacated the premises. Their business may have been struggling or they were experiencing personal hardship. Whatever the reason you are now left with a vacant investment property and are concerned as it can be difficult to find a suitable tenant at the particular time of year. You can ease the burden by retaining the bond and things will be ok for a few weeks but as time goes on and the realisation that it may take a while longer to find a new tenant sets in. Now is when the Rent Default option could really shine.


“Tip: Find a managing agent who understands the role they play in

satisfying the conditions of your insurance”



The Technical Stuff

As with all insurance policies there will always be conditions you need to adhere to and this will ensure you get the most from your policy.  It is essential to understand your policy conditions and share this understanding with your managing agent. Get comfortable reading your policy documents and discuss the details with your insurer or broker. Take particular notice of the exclusions relevant to your circumstance.