Risk snapshot
A two-level mixed-use property in the eastern suburbs of Sydney. Sum insured in the low millions. Ground floor occupied by a specialist home-finishes retail tenant. Upper level used for short-stay accommodation. Mortgagee interest noted on title.
Situation
The client needed a combined property programme covering building, contents, and rent receivable across both the commercial tenancy and the short-stay accommodation. The mix of a home-finishes retail tenant at ground level with short-stay residential above is the profile most mainstream markets use as a hard decline trigger. A retail tenancy handling surface-finishing product carries flammability concerns, short-stay residential carries guest-turnover exposure, and the two stacked together in a single building trip every standard business-pack filter.
Construction and exposure
Renovated and rewired in the prior decade. Fire protection included smoke and CO2 detectors. Security via alarms and keyed access, no accessible windows. The commercial tenant operated a specialist home-finishes retail and consultative business.
The underwriting question that drove the market journey was whether the tenant conducted any on-site processing of the products they sold. Different handling profiles carry materially different fire-load implications, and the specialist ISR market could not price the risk without that resolved. The answer came back as retail display and sale only, no on-site processing. With that confirmed, the risk moved to firm quote.
Cover structure
ISR wording covering the building sum insured, contents, and rent receivable for both the commercial tenancy and the short-stay accommodation. Twelve month indemnity period on loss of rent. Single placement across the combined programme.
Market journey
Twelve markets approached in total. Eleven declined. Decline reasons clustered around tenant occupation. A specialist retail tenancy handling finishing products, stacked short-stay residential, and the combination on a single programme all fell outside mainstream appetite. A specialist ISR market engaged through proposal, resolved the processing-question with the broker and client, and returned firm terms on the full programme.
Outcome
Firm ISR terms returned around $17,000 for the annual programme. Full building and contents sums insured preserved, rent receivable covered across both the commercial tenancy and the short-stay accommodation, on a twelve month indemnity.
Why it mattered
This is the exact mid-sized mixed-use risk that sits between products. Too specialised for an SME pack, too small to attract weight at the heavier end of the ISR market. The answer is a specialist market that understands short-stay residential above commercial, will engage on a finishing-products retail occupancy once the processing question is resolved, and will price the building plus the rent receivable across both tenant types on one programme.