Commercial property owners in New Zealand are facing closer inspection from underwriters at renewal, with insurers paying greater attention to how assets are presented, documented, and maintained. Global brokerage Lockton has released a guide identifying five areas of property risk it says owners and developers should address before going to market. The May 2026 publication, directed at commercial property developers, owners, and investors, frames the challenge not as any single deficiency but as a pattern of uncertainty spread across an asset’s lifecycle. According to Lockton, that accumulation of uncertainty – rather than one significant problem – is what tends to move market outcomes, affect pricing, restrict terms, or reduce insurer appetite. The five areas Lockton identifies are building information, catastrophe and environmental exposure, financial structure, policy design, and development-stage risk. The guide offers a reference point for client conversations around renewal preparation and risk positioning.
The first area looks at what Lockton terms building information – the physical condition of a property and the operational systems running alongside it. The brokerage calls for structural assessments to be current and for fire protection systems – including sprinklers, alarms, and suppression equipment – to be subject to documented testing schedules. Access controls and security infrastructure should be monitored and functioning. Beyond the physical, Lockton points to the importance of a documented risk management program, one where loss prevention protocols are not just in place but actively measured. The firm’s position is that underwriters draw more confidence from assets where risk programs can be demonstrated, not simply described.
The second area addresses catastrophe exposure – a topic with direct bearing on New Zealand’s commercial property market, where earthquake, flood, and weather-related risks influence insurer appetite and reinsurance terms. Lockton advises property owners to assess which natural hazards materially affect how an asset is priced and to evaluate whether mitigation investments have delivered any measurable reduction in premium.
Emergency response plans, the firm says, should be tested at regular intervals rather than treated as static documents. Lockton also identifies alternative risk transfer structures – including captives and parametric cover – as options property owners should consider where conventional insurance is tightening or unavailable. For perils that fall outside the coverage market, the guide recommends financial planning as a deliberate strategy rather than an afterthought.
The third area focuses on the financial architecture of an insurance program. Lockton recommends that sums insured, deductibles, and premium performance be reviewed over at least a five-year window. Short review horizons, the brokerage argues, leave property owners exposed to cost movements they have not anticipated and create conditions where underinsurance goes undetected. On the income side, business interruption coverage should be mapped against the actual lease structures and tenant composition of a property. Where coverage is not calibrated to lease economics, Lockton says gaps in protection can emerge that only become apparent after a loss event.
The fourth area turns to the design of the insurance program itself. Lockton’s guide asks whether policy rate performance has been tracked over five or more years – a lens the firm uses to position insurance cost as something connected to the quality of risk management rather than a fixed line item. The brokerage draws attention to how deductibles, exclusions, and uninsurable perils interact with coverage outcomes. Where business interruption cover has not been aligned to the specifics of a property’s lease and tenant profile, Lockton says the result can be structural protection gaps that surface only at the point of a claim.
The fifth and final area applies to projects still in planning or under construction. Lockton highlights Delay in Start-Up (DSU) exposure as something that should be identified and insured against early in the development cycle. Climate risk, the firm says, should be factored into design decisions from the outset – including site selection – rather than addressed retrospectively. The guide also points to legacy environmental liability as a consideration during planning, recommending that environmental factors be reviewed to identify potential exposure before construction begins. Lockton notes that Latent Defects Insurance (LDI) can address risks that only materialise after a development is handed over, and that this type of cover can carry weight in conversations with lenders and insurers.
The Lockton framework offers a practical structure for pre-renewal risk conversations. The country’s exposure to seismic and weather-related events has made natural hazard documentation a recurring underwriting concern, and the guide’s emphasis on climate risk alignment and alternative transfer options reflects conditions that are already present in the local market.
