Your home and your business premises are both buildings, but the property inside them serves very different purposes. A home contains personal belongings, while an office, shop, or warehouse holds property used for business. This difference is important when you look at property insurance because the cover needs to relate to the property being insured.
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What is Different About Home and Business Property?
The biggest difference is how the property is used. At home, you are mainly insuring the place where you live and the belongings kept there. At business premises, the property may include equipment, stock, furniture, machinery, fittings, and other items used for work.
The policy terms can also differ depending on the property and its use. Here is a simple comparison:
| What to Compare | Home | Business Premises |
| Main use | Living and residential use | Running a business |
| Property | Home structure and specified household property | Business premises and specified business property |
| Contents | Personal belongings and household items | Equipment, stock, furniture, and other business contents |
| Policy terms | Terms applicable to residential property | Terms applicable to commercial property |
These are general differences. The property covered and the terms that apply will depend on the policy you choose.
Does Fire Insurance Work the Same Way for Both?
Fire insurance can provide cover for specified property against fire and other perils listed in the applicable policy. The property covered can differ depending on the type of premises and the policy selected.
For example, a home policy may address specified residential property and contents, while a commercial property policy may address business premises or specified business assets. You should check the applicable policy wording rather than assume that the same list of property or perils applies in both cases.
What Should You Consider When Valuing the Property?
The value you need to consider depends on what is being insured and the valuation basis stated in the applicable policy.
For a home, this could involve the residential property and household contents specified under the policy. For a business, you may also need to account for assets such as:
- Machinery or specialised equipment
- Furniture and office equipment
- Stock or raw materials
- Fixtures and fittings
- Other business property kept at the premises
Keep the information updated when you purchase new assets, alter the premises, or change how the property is used.
Which Policy Details Should You Compare?
Once you know what property is relevant, move to the policy terms. A comparison can help you examine the details that actually differ.
- Property covered: Check which building, contents, equipment, or other property is specified.
- Sum insured: Check the amount stated for each relevant category of property.
- Covered perils: Review the perils listed under the applicable policy.
- Exclusions: Check which property, circumstances, or losses are excluded.
- Conditions: Read the conditions attached to the cover and the insured property.
If you operate from rented premises, also check how the policy treats the property that belongs to you and the property forming part of the premises.
When Should You Review Your Property Insurance?
Your insurance requirements can change when the property or its use changes. Review the applicable policy terms when you:
- Move to new premises
- Renovate or alter the property
- Purchase substantial new equipment
- Increase or change your stock
- Change the way the premises are used
Conclusion
Home and commercial property insurance differ mainly because the property serves different purposes. That difference affects what you need to identify before reviewing the applicable policy. Instead of assuming that a residential policy and a commercial policy work in the same way, look at the property specified, sum insured, covered perils, exclusions, and conditions. Keeping these details aligned with the property you actually own or use gives you a clearer basis for reviewing your cover.
