As businesses continue to cease/suspend trading, whether forced by the Government or Local Authority, or simply as a precautionary measure to avoid the risk of further spreading the Covid-19 virus, it is a natural consequence that their premises may become unoccupied.
The unoccupancy of a property can have serious implications to the insurance cover offered by the insurer. The vast majority of insurance policies that provide cover for property (i.e. buildings, contents, stock, equipment, plant and the like) contain a general condition that the insurer is notified IMMEDIATELY that a premises becomes unoccupied. This does not just apply to buildings policies but all property damage policies.
Most policies will maintain full cover for a 30 day period from the date on which a property first becomes unoccupied but this can vary between insurers with some offering as little as 7 days and some extending to 60 days. Thereafter, insurers may restrict cover to reduced perils, impose additional conditions that must be complied with for the policy to react in the event of an insured loss and also charge an additional premium given the increased risks that unoccupied properties present to the insurance market.
Failure to notify an insurer as to when a property becomes unoccupied may be considered as a breach of a general policy condition. In such circumstances, even where any period of full cover is provided, insurers would be within their rights to refuse a claim for a loss occurring the day after a property became unoccupied if they had not been advised of it having become unoccupied.
All policies, of course, contain different terms and conditions and the above is an overview of most standard property insurance contracts. However, as your insurance broker we feel it our duty to highlight the potential cover implications that an unoccupied property present.
You may rest assured that we are working closely with insurers in an effort to ensure that the widest possible cover is available for all our clients. However, at the time of writing there has not been any indication whether insurers will give consideration to amending their unoccupancy conditions as a result of the Covid-19 crisis that is affecting us all.
We will, of course, continue to monitor market developments to ensure that our clients best interests are protected. If you are one of the many businesses that have had to suspend/cease trading leaving premises unoccupied and you have not already informed us, please contact us on 0800 689 1370 as soon as possible.