With the UK being in lockdown for the last couple of weeks, many business premises are currently no longer in daily use. Business owners should be aware of unoccupancy conditions on their insurance policy that may apply as a result of this.
General guidance around this topic:
· It is important to distinguish between temporarily closed premises due to COVID-19, and previously longer terms unoccupied premises which are likely to have more stringent conditions applied at inception or renewal.
· For properties that are temporarily closed due to Covid-19, there will be policy conditions applied which should be adhered to in order to safeguard cover.
· There has been varied responses from the insurance market in reaction to the current climate, including extending the usual period before any unoccupied cover restrictions or terms apply, and waiving or delaying weekly inspections that are usually required. The best advice is to contact your insurance advisor to clarify your current insurers response.
· The Association of British Insurers have provided the following guidance for policyholders.
The ABI guidance to clients is as follows:
If a business has to temporarily close because of Covid-19, where customers are taking the appropriate steps to mitigate the risk of damage to the property whilst unoccupied, insurers will be flexible around the period of un-occupancy specified on the policy document.
Policies will often include conditions that are intended to ensure good practice in protecting buildings of damage caused by the risk of fire, theft and escape of water, which are often increased when a building is empty. It is important that business owners continue to follow risk management advice and ensure they understand what steps they need to take.
Some insurers have also waived requirements for their business customers to immediately notify them of their unoccupied status, (depending on the individual business circumstances). This should help those customers concentrate on managing their businesses and allow insurers’ call centres to focus on managing the significant number of insurance claims being processed.
If there are any specific requirements as part of your insurance contract that you are unable or unlikely to be able to comply with, such as on-site security, speak to your insurer or insurance advisor/broker.
Some additional guidance notes and advice are shown below:
Risk Management Guidance
• Waste – Remove all external waste, pallets and empty skips before closure of the premises.
• Waste bins – Empty all waste bins and move to a secure area, ideally at least 10 metres from the building. If it is not possible to keep at least 10 metres, then these bins should have lockable lids.
• Fire Systems – Ensure all fire and/or sprinkler systems remain fully operational.
• Fire Doors – Check to ensure that internal fire doors are closed.
• Building Utilities – Ensure all non-essential electrical devices and building utilities are turned off.
• Inspections – Arrange for a weekly inspection of the building (internally and externally and only where it is safe to do so), risk assess for any lone working issues. Comply with existing government guidance regarding vulnerable people and lone worker risk assessments. Consider the provisioning for alternative skilled personnel.
• Physical Security – Check that physical security measures are in place and effective. For example, fences are fit for purpose and in good repair, windows are locked, shutters are in place, gates are locked.
• Intruder Alarm – Set Intruder alarms and ensure that the remote signalling is in place. Make sure there is a sufficient number of key holders available to respond to an activation within 20 minutes.
• Maintenance – As long as it is practical, continue essential maintenance and complete any remedial measures. Continue to respond to all Building Management Systems (BMS) alerts.
If you wish to discuss your specific situation, please do get in touch with us and we will be happy to assist.
Stuart, Mike, James