Fire insurance ≠ office insurance
This is the single most common misunderstanding among SME owners. When your landlord or building management asks for "insurance", they usually mean fire insurance — a policy that only covers damage to the building structure. Fire insurance typically covers three things: fire, lightning, and explosion that cause damage to the building. Note: "the building" — walls, ceilings, floors. Not your company's property.
What about the computers on your desks, the equipment in your server room, your office furniture and stock? Fire insurance does not cover them. A burst pipe soaking your paperwork and electronics? Also not covered. If all you have is the fire policy your landlord asked for, most of your company's assets are essentially unprotected.
Office insurance (property all-risks) is what you actually need
Office insurance, formally known as property all-risks insurance, has a much broader scope. It typically covers:
- Contents: Furniture, computers, printers, servers, stock — loss or damage from fire, flooding, burst pipes, typhoons, theft, and more
- Tenant's improvements: Renovations, partitions, air-conditioning modifications you paid for (your landlord won't cover these)
- Money: Cash stolen from your premises (usually subject to a sub-limit, not full coverage)
- Glass: Shopfront or glass door damage for ground-floor or retail units
In short: fire insurance covers the building. Property all-risks covers your business. The insured subject is completely different.
Why does your landlord only ask for fire insurance?
Because the landlord cares about their asset — the building. The insurance clause in your tenancy agreement is typically there to protect the landlord's interests: if your business accidentally causes a fire that damages their property, they want to know someone will pay. So the landlord asks you to buy fire insurance with the landlord named as a beneficiary — not insurance that protects your own company.
As for your company's assets and your business interruption risk — it's not the landlord's job to remind you. That's something you need to look after yourself as a business owner.
Fire insurance vs property all-risks: at a glance
| Coverage | Fire Insurance | Office Property All-Risks |
|---|---|---|
| Building structure damage | ✅ Covered | ❌ Not covered (landlord's own policy) |
| Business contents (computers, furniture, stock) | ❌ Not covered | ✅ Covered |
| Burst pipes / water damage | ❌ Not covered | ✅ Covered (check terms) |
| Typhoon damage | ❌ Not covered | ✅ Covered (check terms) |
| Theft | ❌ Not covered | ✅ Covered |
| Tenant's improvements / renovations | ❌ Not covered | ✅ Covered |
| Third-party liability | ❌ Not covered | ❌ Not covered (separate policy needed — see below) |
One more thing: third-party liability (public liability)
Property all-risks covers your "stuff", but not your "legal liability". If your air conditioner leaks and damages the shop downstairs, a delivery injures someone, or a visitor slips in your office — these fall under public liability insurance. Property all-risks and public liability are two separate policies, but many insurers offer "office package" policies that bundle them together, often at a better rate than buying separately.
For a full breakdown of what public liability covers and doesn't cover, see our Public Liability Insurance Guide.
And one more: business interruption insurance
Say there's a fire in your shop (or the unit above floods and soaks everything). You have to close for a month for repairs. That month's income is gone, but rent, salaries, and supplier payments still need to be made. Property all-risks pays for your renovations and stock — but not the income you lost while closed. That's what business interruption insurance covers.
Property all-risks and business interruption are typically purchased as a pair — buying them separately costs significantly more. We have a detailed guide on typhoon-related closures at our Typhoon Closure Coverage Guide.
What about shared offices and co-working spaces?
If you share a unit with another business, or rent a room in a co-working space:
- Building fire insurance: Usually covers the entire building structure — not your concern
- Your contents: Everything within your area (computers, documents, equipment) needs your own property insurance
- Common area liability: Shared pantries, corridors — depends on the lease. The landlord may already have public liability covering these areas, but confirm
The safest approach: pull out your tenancy agreement and read the insurance clause carefully. It usually states "the tenant shall maintain fire insurance of not less than $X" and "the tenant shall maintain public liability insurance of not less than $Y". These figures are the landlord's minimum requirements — not necessarily the level of protection your business actually needs.
How much cover should you buy?
There's no one-size-fits-all formula, but consider these angles:
- Contents replacement cost: What would it cost to replace every computer, piece of furniture, stock item, and piece of equipment from scratch? Use new-for-old replacement values, not depreciated book values
- Renovation cost: How much did you spend on fitting out the space when you moved in? What would it cost to redo it all after a fire?
- Lease requirements: Your landlord specified minimum sums — you must at least meet these
- Cash and valuables: How much cash does your business hold on premises? Any high-value equipment? Most policies have sub-limits for cash and valuables
Before you buy office insurance, check these 5 things
- What does your lease require? — Is it fire insurance only, or does it also require public liability?
- Calculate your total asset value — Don't forget IT equipment and inventory
- Are natural disasters covered? — Typhoons, floods, landslides: confirm what's automatic and what's an add-on
- What's the excess? — How much do you pay out of pocket per claim? Typically ranges from a few thousand to tens of thousands
- New-for-old or indemnity basis? — The former pays full replacement cost; the latter deducts depreciation — a significant difference