Does Commercial Strata Insurance Cover a Tenant's Machinery in a Warehouse Unit?
Commercial strata covers the building and common property of an industrial scheme. It doesn't cover what a tenant owns inside their own unit. Here's the line.
By Jack O'Hagan, Co-Founder & Insurance Broker
Published 21 August 2026 · 4 min read
In this guide
Commercial strata insurance covers the building structure, common property and shared plant of an industrial or warehouse scheme. It doesn’t cover what a tenant owns and operates inside their own unit. That line surprises a lot of tenants who assume the strata policy extends further than it actually does.
Building + common property
what a commercial strata policy actually covers
Not a tenant's own gear
machinery, stock and fittings inside a unit sit outside the strata policy
$3,000 to $20,000+
typical annual premium range for a commercial strata scheme
What does commercial strata insurance actually cover for an industrial scheme?
A standard commercial strata policy covers the building structure and common property, common area contents including shared facilities and plant, public liability for incidents in common areas, office bearers’ liability for committee members and machinery breakdown for shared plant such as lifts or HVAC systems. All of this sits at the scheme level, covering what belongs to the owners corporation collectively, not what any individual tenant brings into their own unit.1
Does it cover a tenant’s own machinery or equipment?
No. This is the boundary that catches people out most often. A tenant’s own machinery, stock and business equipment inside their unit sits entirely outside the commercial strata policy, regardless of how long they’ve operated there or how the lease is structured. The strata scheme insures the building and the common property. The tenant is responsible for insuring what they actually own and operate inside it.
The strata policy stops at the walls of the unit. Everything a tenant owns inside those walls is their own responsibility to insure.
A tenant running production equipment or mobile plant out of a warehouse unit generally needs their own plant and machinery cover for it. Stock, fittings and the tenant’s own contents generally sit under a business pack instead, arranged separately from whatever the owners corporation holds for the building.
A forklift damaged in an internal collision inside a leased warehouse unit is a common example of where this line actually gets tested. The building around it, the roller door, the concrete floor, the racking fixed to the structure, sits under the strata scheme’s cover. The forklift itself doesn’t, regardless of how long the tenant has operated from that unit or what the lease says about the premises generally. Two different policies are doing two different jobs in the same building. Assuming one covers what the other is actually responsible for is where gaps open up.
A shared wall, a common roof or a services conduit running between two units are the kinds of connections that most often blur where a strata matter ends and an individual tenant dispute begins. Getting this reviewed properly at the outset, rather than working it out for the first time after a loss, is generally the better order to do things in.
Why is industrial strata often harder to place than office or retail strata?
Industrial schemes commonly involve hazardous tenancies, heavy vehicle and forklift movement and large span roof structures. Each of these narrows the field of insurers willing to quote compared to a straightforward office or retail scheme. This doesn’t mean cover is unavailable. It means the range of insurers actually competing for the risk is smaller. A broker with access to the specialist market is often what closes that gap.
Key Takeaways
- Commercial strata insurance covers the building, common property and shared plant, not what a tenant owns inside their own unit.
- A tenant's machinery generally needs its own plant and machinery cover, separate from the strata scheme entirely.
- A tenant's stock and fittings generally sit under a business pack, not the strata policy.
- Industrial schemes are often harder to place than office or retail strata due to hazardous tenancies and heavy vehicle movement.
- Smaller schemes generally run $3,000 to $10,000 a year, larger or more complex ones $10,000 to $20,000 or more.
Whether you sit on the committee insuring the scheme or you’re a tenant working out what you need to cover yourself, Cipher can help you find the right line between the two. Get in touch.
The information in this article is general in nature and does not constitute legal, financial or insurance advice. Please speak with a qualified adviser about your specific circumstances.
Footnotes
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Types of business insurance, business.gov.au ↩
Not sure how this applies to your situation?
Frequently asked questions
Does commercial strata insurance cover a tenant's machinery or equipment in a warehouse unit?
No. Commercial strata insurance covers the building structure, common property and shared plant such as lifts or loading dock equipment. A tenant's own machinery, stock and business equipment inside their unit sits outside that cover entirely. The tenant needs their own policy for it.
What does commercial strata insurance actually cover for an industrial or warehouse scheme?
A standard commercial strata policy covers the building structure and common property, common area contents including shared facilities and plant, public liability for incidents in common areas, office bearers' liability for committee members and machinery breakdown for shared plant such as lifts or HVAC systems. Exact scope varies by policy and insurer.
Who insures a tenant's stock and machinery in an industrial strata unit?
The tenant does, through their own business insurance. The owners corporation's commercial strata policy responds to the building and common property. A tenant's own machinery generally needs plant and machinery cover. Their stock and fittings generally sit under a business pack, arranged separately from the strata scheme entirely.
Why is industrial strata often harder to place than office or retail strata?
Industrial schemes commonly involve hazardous tenancies, heavy vehicle and forklift movement and large span roof structures, all of which narrow the field of insurers willing to quote compared to a straightforward office or retail scheme. Cover generally remains available. The range of insurers actually competing for the risk is smaller.
Does commercial strata cover damage one tenant causes to a neighbouring unit?
This generally sits with the strata scheme's public liability cover, since it responds to third party property damage connected to the common scheme. Whether a specific incident is treated as a strata matter or a dispute between the individual tenants involved can depend on the circumstances, which is worth discussing directly rather than assuming the answer either way. A shared wall, a common roof or a services conduit running between two units are the kinds of connections that most often blur this line in practice.
How much does industrial strata insurance cost in Australia?
Smaller commercial strata schemes can generally attract premiums from around $3,000 to $10,000 a year, with larger buildings or more complex tenant mixes attracting premiums from $10,000 to $20,000 or more. Industrial schemes with hazardous tenancies or heavy vehicle movement often sit toward the higher end of that range given the narrower field of insurers willing to quote. These are general market ranges only.
What information do insurers need to quote industrial strata cover?
Insurers typically ask for the building sum insured, the number of lots, the tenant mix and the nature of activities carried out in each unit, the building's age and construction and claims history. Presenting the tenant mix accurately makes a real difference to which insurers are willing to quote.
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Where this guide fits
Investment Property
This guide sits alongside our Investment Property cover pages.
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Jack O'Hagan
Co-Founder & Insurance Broker
Jack spent 6+ years across law, finance and insurance, seeing the impact insurance can have on the growth of a business. With a strong focus on advocacy, he firmly believes insurance broking does not stop after the policy has been placed. It continues when a claim is lodged. He co-founded Cipher Insurance to help Australian businesses get the right broker experience.