Arson and Malicious Damage: What Victorian Businesses and Landlords Should Review

Property insurance decisions are usually made at renewal, once a year, and often without much thought. A pattern of incidents affecting commercial properties and businesses across Victoria in recent years is a reasonable prompt to look again sooner. Here’s what business owners, hospitality operators, landlords and owners corporations should each be checking on their cover, regardless of the cause of any individual incident.

Four Perspectives, One Practical Question

This isn’t one story, it’s four and five, depending on where you sit, and each group’s question is the same: does my current cover respond the way I assume it does?

If you’re a business trading in a commercial strip, the question is whether your policy responds to damage that didn’t originate on your own premises. If you operate a hospitality venue, the question is whether your sum insured and business interruption cover reflect current risk. If you’re a landlord, the question is about disclosure and building insurability. If you’re on an owners corporation, the question is shared across every lot in the building.

None of what follows makes any claim about why any particular incident occurred, or about any specific business, tenant or industry. It’s a set of insurance questions worth asking given a pattern that has been reported consistently by Victoria Police and Victorian media over recent years.

If You’re a Business Trading in an Affected Area

Reports over recent years have described a pattern of fire and malicious damage incidents affecting commercial properties in parts of Victoria. Where this happens, the practical exposure for a nearby business is straightforward: property damage or a forced closure caused by an incident that didn’t originate on their own premises.

What to check on your policy:

• Does your commercial property cover respond to damage from fire or malicious acts regardless of where the incident originated, not only to events that occurred inside your own tenancy?
• Does your business interruption cover include an indemnity period long enough for a genuinely serious repair or rebuild?
• Is your sum insured for stock, fit-out and equipment current, or has it gone unreviewed while replacement costs have moved?

This is a standard adequacy check. It applies regardless of what may or may not have caused any particular incident in the area.

If You Operate a Hospitality Venue

Separately, reporting has described a pattern of incidents affecting hospitality venues, bars and nightclubs in particular, across parts of Melbourne over the past couple of years. As with the pattern above, we’re not making any claim here about cause, motive, or any specific venue. The practical point is simply that hospitality fit-outs are often high value and can be underinsured relative to actual replacement cost, and that’s worth checking regardless of the surrounding context.

What to check if you operate a licensed venue:

• Does your policy clearly distinguish accidental fire from malicious damage, and is your sum insured set at actual fit-out replacement cost rather than a figure carried over from a previous renewal?
• Does your business interruption cover allow for an extended closure period, in the event that a serious incident requires a longer reinstatement or investigation timeline than a routine claim?
• If your venue has CCTV or other security infrastructure, has this been disclosed to your insurer? It’s worth confirming whether this affects your premium or excess.
• Is your public liability cover set at a level appropriate for a venue with regular patron numbers on-site?

If You’re a Landlord

Insurer appetite for certain types of commercial tenancies has reportedly shifted in recent years, with brokers describing more cautious underwriting and, in some cases, higher premiums for buildings with particular tenant profiles. Where premium increases are shared across a building, this can affect outgoings for tenants who have no direct connection to whatever prompted the insurer’s caution.

There’s also a disclosure principle worth understanding, independent of any specific circumstance: insurers generally expect to be told what they need to know to assess a risk properly, and a claim can be affected where relevant information wasn’t disclosed. This is simply good practice for any landlord, not a response to any particular tenant type.

What to check as a landlord:

• Has your insurer been given an accurate and current picture of your building’s tenancy mix?
• Does your policy cover malicious damage and arson specifically, as distinct from accidental fire? These are often different clauses with different terms.
• If you’re uncertain whether a tenant holds a licence relevant to their trade, Victoria’s public tobacco licensing register, in operation since February 2026, is one example of a resource that can help confirm this directly rather than relying on assumption.

If You’re Part of an Owners Corporation

A strata building’s insurability is generally assessed as a whole, which means the terms available to an owners corporation can be affected by the overall tenancy mix, not just by any one lot. This is a structural feature of how strata insurance is underwritten, independent of any specific incident or industry.

Brokers have reported that a meaningful share of insurers are more cautious writing cover for certain building profiles at present, and that excess levels in particular have moved for some buildings. This is a market condition worth understanding, not a judgement about any tenant.

What to check as an owners corporation:

• Has the committee reviewed the building’s current tenancy mix against what insurers are currently pricing for, rather than relying on terms set at a previous renewal?
• Is there a process for the committee to be informed of insurance implications before a new lease is signed, so this can be factored in ahead of time rather than discovered at renewal?
• Has the building’s excess structure been reviewed recently against current market conditions?

Why We’re Raising This Now

Victoria has introduced a licensing scheme for tobacco retailers, in force since 1 February 2026, and insurer underwriting practices for certain commercial tenancies and building profiles have reportedly shifted over the same period. Together, these make this a sensible moment for a general insurance review, regardless of a business’s own trade or location. None of this is about identifying, characterising or drawing conclusions about any particular business, tenant or incident. It’s about making sure the cover reflects current conditions.

Frequently Asked Questions

Does business insurance cover damage caused by an incident that didn’t happen on my own premises?
Generally, commercial property policies can respond to fire or malicious damage regardless of where it originated, but this depends on your specific policy wording. It’s worth confirming directly with your insurer or broker rather than assuming.

Should hospitality operators be doing anything differently right now?
The most useful step is reviewing sum insured against actual fit-out replacement cost and confirming the length of business interruption cover, rather than assuming settings from a previous renewal still reflect current circumstances.

Can a landlord’s insurance be affected by something they weren’t aware of?
Generally, non-disclosure of information a landlord actually knew about can affect a claim, but this is different from information a landlord had no way of knowing. Keeping your insurer informed of your current tenancy mix is good practice regardless.

How can I check a tenant’s licensing status in Victoria?
For tobacco retail specifically, Tobacco Licensing Victoria maintains a public register, in operation since 1 February 2026, which can be checked directly.

Where to Start

Whichever group above applies to you, the starting point is the same: a conversation with your broker at Knightsbridge Insurance Group about what your current policy actually responds to, rather than what you assume it does. This isn’t about any specific business, industry or incident. It’s about knowing where your own cover stands.

Want a straightforward review of your commercial property, hospitality, strata or business interruption cover? Speak with Knightsbridge Insurance Group about what your current policy actually responds to.

Important Disclaimer: This article provides general information only and does not constitute legal or financial advice. Legal expenses insurance requirements and coverage vary significantly based on individual businesses, industries, and the specific policy terms of each insurer. Readers should assess their specific legal expenses coverage needs and consult with qualified insurance professionals before making risk management decisions. Knightsbridge Insurance Group holds Australian Financial Services Licence 514855.