June 2020 This communication only relates to you if your business premises remains unoccupied due to Coronavirus. When the lockdown commenced, insurers understood that business premises were being left unoccupied due to instructions from the Government to manage the potential spread of Coronavirus. Policies generally define a building as unoccupied if empty, or not being fully utilised for business purposes, usually for a period in excess of 30 days. If a property remains unoccupied beyond this period then restrictions are imposed to covers provided due to the higher risk of damage or loss from various causes, i.e. water damage, arson and theft. In support of customers and businesses, insurers extended the period they consider a property as unoccupied, thereby affording you full cover for an extended period. As the pandemic continued, further extensions were seen. As lockdown restrictions begin to ease and economic and social activities increase, certain business sectors have now been offered the opportunity to recommence trading from their business premises. Insurers are therefore now reviewing the extended covers that have been provided to policyholders whilst properties and business premises have been unoccupied due to Coronavirus. As you’d expect, we arrange cover for our clients with a wide range of insurers and therefore we would be unable to detail specifics to your policy or insurers approach in this message. Therefore the following provides an overview of what we’re beginning to see from communications received from insurers.
If your businesses remains compulsorily closed due to the lockdown (those who must remain closed under the Health Protection (Coronavirus Restrictions) Regulations as appropriate for England/Scotland/Wales/Northern Ireland), insurers are likely to extend the unoccupancy definition.
For businesses where closure is not mandated, but the business chooses to remain temporarily closed, perhaps because you continue to adopt a work from home protocol, or due to ongoing staff furloughing, you need to inform us so we can discuss your circumstances with your insurer. Again, whilst we cannot give you a definitive response here insurers may adopt a combination of the following approaches, or additional required action not listed;
The property to be appropriately secured and protected as follows:
the building must be inspected internally and externally at least once per week.
all refuse and waste materials must be removed from the premises.
the building must be secured, and all protective locks/alarms activated.
gas and electricity may be required to be turned-off at the mains (other than any electricity supply supporting any intruder or fire alarm).
require you to seal letterboxes.require the water supply to be isolated at the mains and all systems drained down.
It is important to understand what your own insurers approach will be as failure to comply with any conditions imposed could result in no cover being in place and insurers refusing to pay a claim. Therefore if your property remains unoccupied due to Coronavirus, for either of the examples mentioned above, we would encourage you to get in touch with your usual Turner Rawlinson contact to discuss your circumstances.