Unoccupied Property Market Response
29, April, 2020
It is important to distinguish between temporarily closed premises due to COVID-19 and previously longer terms unoccupied premises, the responses contained below are aimed at the temporarily closed premises, for those customers whom have longer terms unoccupied exposures we urge they review their policy document and notify us immediately If they are struggling to adhere to any pertinent policy conditions.
The ABI have released the following guidance
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 adviser/broker.
Utilise this checklist to keep your unoccupied commercial property protected during the COVID-19 pandemic.
The table below includes the unoccupancy position from specific insurers where we have obtained a response. If your insurer is not listed, please contact your broker for more information. If your insurer is listed, please check your insurer’s occupancy position and if your property is going to be left unoccupied for more than the total consecutive days or you require additional clarity due to the specific circumstances then please make contact.
Based on your feedback, we’ve updated our position on Temporarily Unoccupied Buildings.
Our cover will now continue to apply to your clients who have followed Government advice to close their premises temporarily for a period of up to 90 consecutive days.
There is therefore no need to immediately notify us that your clients insured premises has closed temporarily due to the COVID-19 outbreak.
For further information on how you and your client’s can protect your business assets, please refer to the Aviva Pandemic Disease Loss Prevention standards.
Most of our products and schemes have unoccupancy conditions that set out what cover will be maintained including; when that will be restricted, and what actions policyholders need to undertake.
Where any premises becomes temporarily unoccupied as a consequence of COVID-19, we’ll not restrict cover from the time the unoccupancy starts, until such time as the restrictions on premises being used or occupied are lifted. This is subject to policyholders applying appropriate best endeavours to manage their premises, including appropriate security measures while they are closed, and adhering to governmental advice and action.
You don’t need to notify us of the unoccupancy, where it occurs as a result of COVID-19.
This amended approach will apply for the next 60 days (from 24 March 2020). We may (subject to review) extend this period further.
Given the current situation, we appreciate that your customers may have had to temporarily leave their premises unoccupied due to the Covid-19 outbreak.
We usually ask that you notify us if the premises are going to be unoccupied for more than 30 consecutive days for Allianz Commercial standard policy wordings, or 45 days for SME wordings. We’re now extending this period to 60 days, so you only need to let us know at the end of the 60 day period if the premises will still be unoccupied. During that 60 day period your customer’s existing cover will remain in place.
If your customer’s premises were already unoccupied before the Covid-19 outbreak, and your customer is unable to meet the terms of our unoccupied conditions due to the current restrictions, please get in touch with your usual Allianz representative.
We’ll continue to review this position as the situation develops
As more and more employees are working from home, and no longer at the insured buildings, you may be concerned that the policy will regard your buildings as unoccupied, untenanted, empty or disused and your cover then restricted.
For an initial period up to and including the 30th June 2020, we will withhold the:
• restrictive policy cover for unoccupancy, and
• policy General Condition that requires you to inform us of the buildings being, or expected to be, unoccupied should your employees be forced to work from home as a result of the COVID-19 outbreak.
However, if your building is no longer occupied this represents a greater risk of significant damage which could delay your organisation getting back up and running, once the current COVID-19 outbreak has passed.
With this in mind we would advise, where you are able to do so safely and within the current government guidelines, you try to ensure that:
1. the buildings are inspected internally and externally by an authorised person once a week to check the security and general condition of the premises;
2. all waste, refuse and other disused combustible materials is cleared from the buildings and any grounds adjacent to it;
3. all external doors must be securely locked and all opening windows closed and locked (where fitted with locking devices);
4. all tanks and pipes must be drained down and when you are able to do this, all taps, stopcocks and mains supply valves turned off. If this is not possible, because you need to maintain a central heating system, a minimum temperature of 7C must be maintained.
5. a) gas supplies should be switched off unless to maintain a central heating system.
b) electricity supplies should be switched off unless to maintain a central heating system or existing intruder alarm systems, fire protection systems, CCTV, security lighting or sprinkler systems.
6. all existing physical devices for securing, or preventing access to, the buildings must be kept in full and effective operation at all times and to have all keys removed from the locks and kept in a secure place away from the premises;
We recognise that you may not be able to complete all of the items listed above, either partially or in their entirety but we would encourage you to consider anything you can do, to reduce the risk of damage or loss, particularly through escaping water from heating systems and security of the premises generally. Your cooperation during this difficult time is very much appreciated.
Are your client’s premises insured if they leave them unoccupied?
On Monday 23rd March, as part of its strategy to tackle the current outbreak of coronavirus, the UK Government mandated that the general population should stay at home for a period of 21 days. Please note that, in these extraordinary circumstances, we will not consider your clients’ premises to be unoccupied during this period. We will continue to review the situation alongside the latest government advice and issue further updates as necessary.
Updated as at 06.04.2020
For the first 90 days that the UK Government Covid-19 closure order applies to your client’s business, we will not consider your premises to be unoccupied. This does not apply to premises that were already unoccupied at the time of the closure order, or those that become permanently unoccupied during this period.
For premises that were already unoccupied at the time of the closure order, or those that have become permanently unoccupied during this period, we will not enforce any condition for regular inspections of the premises.
All of the above will be subject to review by the 1st June 2020, with any amendments advised accordingly.
Given that many sectors of the economy remain in some form of lockdown and that this looks set to continue for some time to come, we are pleased to confirm that we will continue to support our existing customers, who are temporarily closed as a result of the Covid-19 lockdown, by extending this initial 60 days to 90 days, up to and including the 15th June.
Please be aware that this does not apply to existing customers if they had unoccupied premises prior to the 16th March, or to businesses which have permanently closed and will not be reopening. Please refer to your local underwriting contact point if you are in any way unsure as to what policy conditions apply in this instance.
30th March – More from Axa (Update)
6th April – More from AXA (Update)
- We will provide continuity of cover for up to 60 consecutive days from the date of closure for any insured premises that is temporarily closed or operating on a limited basis due to COVID-19 restrictions as a result of the Government guidance. There is no need for immediate notification from the insured in these circumstances for continuity of cover.
- If any insured location is requisitioned or the insured volunteers the premises for alternative use during the COVID-19 situation, then a change of use should be notified to your Chubb Underwriter.
- The insured should:
1. Follow our Risk Engineering guidelines. Download them below.
2. Continue to take appropriate steps to mitigate the risk of damage whilst the premises are impacted. Should this prove impracticable please, contact your Chubb Underwriter.
3. Comply with any policy conditions to the best of their ability and to the extent this is practicable.
Vacancy beyond 60 days requires notification from the insured and the ongoing approach will be assessed by the underwriter on a case by case basis.
Troon Underwriting carriers have communicated their stance as outlined below:
Our underwriting team have reached the decision that with immediate effect that if a business is closed as a result of the COVID-19 situation coverage afforded by the policy will continue to operate as if the business were continuing to trade from the premises. This provision will not apply to new business risks quoted/incepted after the outbreak with specific coverage restrictions applied.
We are providing this amendment to cover up to and including the 31st May 2020 thereafter we reserve our rights to rely upon the original policy wording although we will notify you in advance of our intentions beyond this period. For unoccupied risks we are agreeing to suspend premises inspection conditions if the inspection(s) cannot be carried out due to government restrictions in the movement of people.
Our underwriting team remain available to look at individual risks where you want us to consider specific cover or variations.
The endorsements below will now apply to all renewals:
It is noted and agreed that cover under this Certificate/Policy will remain unaltered up to and including the 31st May 2020 (provided this Certificate/Policy has not expired) if the Premises become Unoccupied as a result of the COVID-19 situation. Thereafter if the Premises remain Unoccupied the original Certificate/Policy wording will apply unless specifically agreed in writing by Us.
If it is a condition of this Certificate/Policy that the Buildings must be regularly inspected We agree that the condition is suspended in the event that the inspection(s) cannot be carried out due to government restrictions in the movement of people. Where our insurer panel have specifically changed their wording, these may be communicated individually, the stance adopted by Trilogy Underwriting, is outlined below
Trilogy’s stance is detailed below:
As you are aware, all businesses are going to be affected in some way, so without specifically commenting on individual cases we would provide our general position and effects on the policyholder. If any doubt regarding a potential claim, we would refer you to our Third-Party Claims administrators, Woodgate & Clark whose contact details can be found in the policy wording. We would point out that our Disease Extension under the Business Interruption section only applies where the Disease has manifested at the Insured Premises but if in doubt, please do not hesitate to contact us.
1. Where Material Damage Sums Insured are reduced, a pro-rata return premium shall be provided. Please note that in some cases minimum premiums may apply.
2. Where Wage and Turnover figures are reduced, we are unable to give return premiums at this stage for the following reasons.
a) Any potential reduction in the business is unknown until we are free of the Pandemic.
b) The Government’s assisting package is in force and will hopefully mitigating any financial losses.
3. Where businesses have ceased trading, our existing Material Damage Unoccupied Exclusion becomes operative (after 30 days). However, we now attach our new Condition and Perils Exclusion which recognises the present position and will go some way to assist the Insured by providing cover.
4. When advised that the business has ceased trading, we shall be applying these conditions to the policy
Please note that failure to advise us that the business is not trading, results in the Unoccupancy Exclusion becoming operative and the Insured not then benefiting from the increased cover. We appreciate it may be difficult to sometimes ensure the premises are regularly inspected by the Insured and/or their personal representative at least once a week, but note that this is a condition of the revised unoccupancy condition, therefore any issues that an Insured may have, please advise us accordingly to see if a solution can be found.
Where Premises under our Commercial and Residentially-let Policies have had to become temporarily unoccupied due to Covid-19 restrictions announced by the Government, brokers and customers will not need to advise us of the temporary unoccupied status of the property, and the existing level of cover will continue for a period of 90 consecutive days from the date the Premises was closed.
Risk Management requirements will still apply after 45 consecutive days of temporary unoccupancy, with the exception of compulsory inspection at times when customers are unable to do so safely. Customers will be required to inspect such Premises when they are next able to do so safely around this period, and maintain logs of this activity.
Where unoccupancy is not due to Covid-19, normal Policy Conditions apply.
For any queries not covered by this statement, agreement from us is required.
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), 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 are 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.
By way of reducing anxiety that our customers may already be facing, we are taking the following approach for existing customers placed with RSA and Accredited.
- We will automatically provide cover for Office Equipment already insured on the policy that is taken home up to a limit of £5,000 any one premises.
- The policy automatically extends to cover employees working from home
- For restaurants, pubs, retail etc that are changing their working practices to provide home deliveries we will automatically include the goods in transit risk up to £2,500 and the associated liabilities – excluding any motor liability risks of course.
- We will confirm to policy holders that they do not need to advise us of any unoccupancy caused by the recent “lockdown” instructions and their cover will not be reduced during this period. They will be required to comply with the 7 day inspection provision for unoccupied properties where this remains possible. If Insureds are prevented from doing this for reasons of Government advice of instructions related to vulnerability or due to further restrictions – road blocks etc. – then again their position would not be prejudiced. All the usual security and fire protection measures are required to be in place. This is to remain in place for as long as the lockdown persists.
- New risks can be written as normal and based on them being trading and occupied but underwriters will consider the potential increased risks, particularly of theft, for premises unoccupied during lockdown, and ensure security is adequately assessed.
No additional premium need to be charged for any of the above.
Premises that are temporarily closed solely due to the COVID-19 outbreak
This does not apply to premises that:
- were unoccupied before the outbreak or that close down permanently which will be deemed unoccupied as defined in the policy and be subject to the normal unoccupied premises terms and conditions as set out in your policy).
- Buildings that are temporarily closed/no longer in regular use are exposed to different and usually greater risk than occupied premises and premises that are open for regular trading.
Our standard policies define “unoccupied” premises and apply standard restrictions in cover and conditions precedent to cover that need to be complied with. Normally a higher premium is charged on unoccupied premises.
To ensure customers are not unduly penalised for temporary closures solely due to the COVID-19 outbreak the following applies to affected premises:
- Unoccupied premises cover restrictions will not apply to Temporarily Closed premises
- Temporarily Closed premises will benefit from:
- no reduction in the level of policy cover
- no increase in excesses
- no increases in premium
provided the Insured complies with the following condition which details appropriate risk management practices (and is less stringent than the unoccupied premises condition).
Temporarily closed premises condition
Temporarily Closed means premises temporarily closed solely due to the COVID-19 outbreak (and such premises will not be regarded as unoccupied as defined in the policy).
It is a condition precedent to liability that in respect of Temporarily Closed premises
- where there will be no need to re-enter the premises during the period of temporary closure you must turn off electricity gas and water supplies at the mains (and where reasonable to do so drain down water systems) other than those services required to maintain:
- critical business infrastructure required to allow the continuance of the organisations operations and support temporary home working arrangements
- Intruder alarms
- fire alarms
- sprinkler installations
- other fire suppression security or other risk protection systems or device
- you must maintain in full and efficient working order and keep operational all:
- sprinkler installations
- fire suppression systems
- locks and all other protective and security devices including gates and other perimeter security protection at the premises.
- where water systems have not been drained down and/or where there is a sprinkler installation you must maintain the central heating system to prevent freezing and
- the sprinkler system should be inspected to ensure it is operating correctly whenever such buildings are inspected
- the temperature throughout the building must be maintained at not less than 7 degrees Centigrade (45 degrees Fahrenheit)
- where annual servicing and maintenance is due the sprinkler system must be serviced and maintained as soon as circumstance permit by an appropriately qualified engineer.
- you must
- remove all internal waste and
- position all external bins as at least 5 metres from the buildings (or otherwise as far as possible where this is not possible) and secure the bins in position where this is possible
- Provided any travel required to carry out an inspection is in line with the latest government advice you must undertake an internal and external inspection of such buildings at least every 7 days and
- rectify as soon as is reasonably possible any defects in the fabric of the building or any protective or security devices or installations
- maintain a record of inspections including the remedy of any defects
- remove accumulations of post from the letterbox during each inspection and take any other action to ensure the premises cannot be easily identified as unused or closed down
- Where government travel advice does not allow the necessary travel to complete an inspection the need for an inspection is deferred until travel restrictions are lifted to a level that allows inspections to re-commence
- you must put in place contingency plans in case the primary person(s) carrying out weekly inspections or responding to alarm activations need to self isolate or are ill so that weekly inspections and alarm activation responses can be maintained by another appointed person
- you must tell us as soon as you become aware of any illegal entry to the premises whether or not any damage has occurred
- you must review and update your risk assessment (including the fire risk assessment) of such buildings to reflect the temporary change in risk
Unless otherwise agreed or varied by us in writing.
- Outstanding risk improvements, periodic conditions and maintenance conditions
- Any policy term that requires regular maintenance, inspection or where we have specified completion of a risk improvement by a specified deadline that cannot be fully complied with or fully completed solely due to the COVID-19 outbreak causing travel restrictions or the lack of availability of contractors
will be held in automatic abeyance until:
- the expiry of the current outbreak or
- the availability of contractors or
- the date the temporary cover enhancement expire
- whichever is the sooner provided all reasonable steps have been attempted to comply with the policy terms or complete risk improvements in part or in whole given the circumstances at the time.
All other policy terms, conditions and exception are unchanged.
We are pleased to advise that we have made the decision to extend the definition of “unoccupied” as shown in our policy wordings to 90 days effective immediately strictly for any risk that becomes unoccupied as a result of COVID-19 and the recent measures implemented by the government.
This coverage change applies to all commercial property business including landlords’ policies where unoccupancy occurs as a result of COVID-19.
As you will appreciate, when premises are no longer occupied this represents a greater risk of loss or damage occurring and it is important that our mutual clients continue to take measures to protect their property wherever possible.
Our decision to extend the definition of “unoccupied” is subject to all policyholders applying appropriate best endeavours to manage and protect their premises, including:
- applying appropriate security measures including all available security devices being put into full and effective operation; and
- inspection of the business/buildings internally and externally by an authorised person at least once per week to check the security and general condition of the premises in accordance with government advice and action.
We would advise customers to record any property inspections undertaken in writing and make such record available for our inspection should it be necessary in the event of a claim.
As matters develop, we will continue to monitor and review our unoccupancy terms along with all other relevant matters. It is important for you to note that this is not a permanent change.
All other policy terms, conditions and exclusions remain unchanged.
What happens if my premises are left unoccupied?
We normally ask you to tell us if your property is going to be left unoccupied for more than 30 consecutive days. Given the exceptional circumstances at the moment, we are extending this period to 90 days. We recommend to shut off the water supply to the premises, and ensure that any measures to prevent thefts are taken, such as locking away equipment and setting intruder alarms.
Pubs & Restaurants Policy & Hotels Package Policy
Please find below revision to the unoccupancy conditions applicable to existing business only that are in effect as of the 24th March 2020 following Government closure for non essential business:
- Unoccupancy period increased to 60 days
- Position is under ongoing review
Subject to the following conditions:
a. Remove all Money from the Premises
b. No increases in the values of declared stock other than for delivery of orders made prior to the date the extension is added
c. Ensure all services are disconnected at the mains except electricity where needed to maintain any fire or intruder alarm systems and a refrigerators or freezers
d. Remove all refuse and waste materials from the Premises
e. Ensure the Premises are secured against unlawful entry
f. Conduct a deep-clean of any Deep Fat Frying & Cooking Equipment
g. A record of compliance with these measures must be retained by the Insured away from the place of Business and be made available to Insurers or their representatives for inspection.
h. The Insured or their authorised representative must carry out a thorough inspection of the Premises on at least a weekly basis and carry out immediately any work necessary to maintain the
security of the Premises unless the Medical Officer of Health for the Public Authority explicitly requires all persons, including the insured, their staff and paid security professionals, to remain
in their private dwelling. The Insured must maintain a written record of such inspections away from the place of Business which must be made available to Insurers or their representatives for
i. The existing policy excesses will apply.
Guest House and B&B Insurance Policy
Holiday Home Policy
Please note that unlike many policies in the market our Holiday Home wording does not reduce to FLEA cover once the property is defined as unoccupied but still provides all the benefits of the policy apart from escape of oil and conditions for escape of water during winter months.
We do appreciate that there is an inspection condition within the wording that may be difficult to comply with as long as the official Government closure lasts. We will replace this condition until the closure is officially over with the following:
It is also a condition precedent to the liability of the COMPANY that whenever the PREMISES are UNOCCUPIED an INSPECTION must be carried out at the PREMISES by YOU or YOUR FAMILY or and appointed representative at intervals not exceeding 14 days other than where government measures prevent such visits.
Guest Houses & B&B Policy
The majority of Guest houses will be occupied by the owners and we will not be making any changes to the wording. If you have a Guest house that has no body living on site please get in touch and we will consider these on a case by case basis
We’re all too aware that the COVID-19 outbreak will have forced many of your clients to close their premises.
If your client has temporarily closed their premises because they are following advice from the Government relating to the COVID-19 outbreak, you do not need to contact us to tell us, until this goes beyond 90 days. However, the monitoring and physical security provisions that were in place before should stay that way.
The following risk management advice should continue to be followed:
- Waste removal – once you’ve removed all internal waste, position all external bins as at least five metres from the buildings (or as far as is possible), securing the bins in position if possible
- Fire systems – make sure fire and/or sprinkler systems are fully operational
- Fire doors – ensure all internal fire doors are closed
- Building utilities – turn off all electrical devices and building utilities that aren’t essential
- Inspections – arrange for an internal and external weekly inspection of the building, as long as the travel required to do the inspection is in line with the latest Government advice
- Physical security – ensure the physical security measures are in place, such making sure doors and windows are locked, shutters are in place and gates are locked
- Intruder alarm – set the intruder alarm, ensuring there are enough key holders 20 minutes away to respond to the alarm if it is triggered
- Maintenance – as much as is possible, continue with essential maintenance works
If we have made specific requirements with regards to security and as a result of the ongoing COVID-19 situation that your client is unable to comply with, please contact your usual Markel UK representative and we will be happy to work with you to address the issue.
If the insured premises was already unoccupied before the COVID-19 outbreak, and you are unable to meet the terms of our unoccupied conditions due to the current restrictions, please get in touch with your usual Markel representative.
Your existing policy terms, conditions and exclusions remain unaltered and the obligations under the policy remain to notify us immediately if you believe you have a claim.
We will continue to monitor the situation and provide you with a further communication if the Government lockdown lasts more than 90 days.We’re all too aware that the COVID-19 outbreak will have forced many of your clients to close their premises.
If your client has temporarily closed their premises because they are following advice from the Government relating to the COVID-19 outbreak, you do not need to contact us to tell us, until this goes beyond 90 days.
What do I do if my client’s business and/or premises is forced to close and becomes temporarily unoccupied?
The recent Government announcement means more businesses will close and many will be working from home. Therefore, many more properties will be unoccupied for the next few weeks, and potentially beyond.
Within NIG’s standard policies, cover will continue to be in force for any Commercial premises temporarily unoccupied for a period of up to 30 consecutive days, and 90 days for premises insured under our Property Owners contract. From 24th March 2020, we are extending this period to 90 consecutive days for Commercial premises and maintaining the same period of 90 days for Property Owners temporarily closing during to COVID-19, before we ask to be notified. For any clients whose premises is going to be out of use for longer than this, you need to notify us using your normal NIG contacts.
Any building left unoccupied naturally poses a greater insurance risk and we therefore need businesses to take the following additional measures for the above extension to apply:
- That the Premises is secured, by putting all protective, locking devices and any alarm protection, in effective operation.
- Where practical, turn off the gas, water and electricity supplies at the mains (except electricity needed to maintain any fire or intruder alarm systems, or water and heating systems for sprinklered Premises).
- Where possible, the Insured or their representative should visit once every 7 days to physically check the premises and carry out immediately any work necessary to maintain the security of the premises in all respects
- Remove all trade refuse and waste materials from the interior of the Premises, allowing no accumulation of refuse or waste in the adjoining yards or spaces owned by the Insured.
All other Conditions requiring Policyholders to take action or respond to intruder alarm activations, faults or other maintenance-related matters will continue to apply unless otherwise agreed to be impractical due to COVID19 Government-directed actions limiting or restricting the movement of people.
With the recent news and uncertainty surrounding the outbreak of COVID-19, many of you have been in touch regarding our policy covers and how we’re operating during this period of disruption. We understand the importance of providing your clients with clarity regarding their insurance covers. That’s why, together with our capacity providers, we’ve applied the below automatic enhancements to our Commercial Combined, Office and Property Owners policies, giving your clients peace of mind. With immediate effect, we’ve amended our terms and conditions for unoccupied properties. As we have different capacity providers across each product, the response differs slightly but each offers an enhancement on the current 30-day limit. Accelerant (HDI Global SE): Full perils can continue on property covers for a period of up to 60 days unoccupancy. Aviva: Full perils can continue on property covers for a period of up to 90 days unoccupancy. Please note, we will not charge an additional premium for these enhancements, but we will still require policyholders to undertake inspections on unoccupied properties as per the conditions set out in the policy wording.For properties unoccupied before the outbreak normal terms and conditions including restricted perils apply.
The spread of Coronavirus (Covid-19) has made it an incredibly difficult time for families and businesses. In order to address the current situation and to provide you with greater assistance during this uncertain period the below is some guidance on how to deal with temporary closures of premises.If your building is temporarily closed, due to the coronavirus and home working, we do not consider that the unoccupied building condition will apply in the current circumstances until the 30th June 2020, unless we have specifically advised you that it must. If the Government restrictions continues for a significant period, we will actively advise customers if any further action is needed.
The below is a checklist of risk control measures to consider in order to help secure buildings provided that you can adhere to the government instructions during this period and to use as a reference point for regular checks during temporary closedown periods.
Risk Control Measures:
- Waste: Remove all external waste, pallets and empty skips ahead of closing
- Waste bins: Empty all waste bins and relocate to a secure area, ideally at least 10 metres from the building. If this is not possible and bins and skips are within 10m, these should have lockable lids.
- Fire Systems: Ensure that any fire and/or sprinkler systems are fully operational
- Fire Doors: Carry out a check to ensure that internal fire doors are closed.
- Building Utilities: Shutdown any non-essential electrical devices and building utilities.
- Arrange for a weekly inspection of the building (internally and externally) – please remember to risk assess for any lone working issues.
- Please ensure that you comply with existing government restrictions.
- Please also follow any instruction/guidance regarding vulnerable people and lone worker risk assessments and only do this if you can adhere to the government instructions/guidance.
- Consider the provisioning for alternative skilled personnel.
- While, we can be flexible in respect of the weekly inspections, our current expectation is that an inspection must be carried out after 45 days (internally and externally) and a written record of that inspection kept although this requirement may change in line with Government requirements.
- In the event you identify any defects or issues that require attention in line with these risk control measures then please rectify these or notify us if you are unable to do so.
- Physical Security: Carry out a check to ensure physical security measures are in place e.g. fences are in good repair, windows are locked, shutters are in place, gates are locked.
- Intruder Alarm: Make sure your intruder alarm is set and that the remote signaling is in place.
Ensure sufficient numbersf keyholders are available to respond to an alarm activation within 20 minutes.
- Maintenance: so far as is reasonably practical, there is an expectation that essential maintenance continues with any remedial measures completed again provided that you can adhere to the government instructions during this period. Premises that have Building Management Systems (BMS) with remote alerts should continue to be responded to.
- Other Considerations:
• If your site normally has 24-hour occupation and you wish to completely close the site, please contact us for advice.
Due to the current situation with Covid-19, a new endorsement is available extending the policy coverage for unoccupancy due to the Covid-19 lockdown to 30 days and thereafter only removing theft (or attempted theft), Escape of Water and malicious damage cover. A full copy of the policy endorsement is available here for your information. It is important to reiterate this 30 days applies from the date the premise became unoccupied and also the unoccupancy conditions that must be complied with, as per the attached endorsement. If any client has issues in complying with these conditions, please can you contact us immediately to discuss options. Given the date of the UK lockdown, obviously this unoccupancy endorsement will now apply to the majority of policies within this sector.
As this endorsement is effectively an increase in cover, it is our intention to apply this automatically to all policies you hold under this product, unless we hear from you to the contrary.
We are fully aware that some insurers in the market are offering longer periods of unoccupancy cover as a result of the Covid-19 lockdown. Unfortunately, our capacity provider in this regard, DTW1991 are steadfast on extending to 30 days only, despite the fact we have made strong representations to increase this. Based on this, we are taking the opportunity to review our capacity provision on our food and hospitality facility more broadly and further information on this will follow in due course. In the meantime, where requested, we may be able to provide terms on our retailers or commercial combined product, where the extended unoccupancy terms are 90 days.
At QBE we recognise the disruption being caused by the Coronavirus outbreak, and in particular the challenge being felt by our clients when operating in the current restricted environment. With buildings and operations being forced to close as a response to the Coronavirus we believe we have the responsibility to clarify how our policies will respond to unoccupied premises, as well as help insured’s to manage the ongoing risks to their business during this period of enforced reduced economic activity. Currently within our policies we have a condition that relates to unoccupied buildings, which we will seek to maintain for current vacant premises, prior to the Coronavirus outbreak. However, for any properties that are temporarily unoccupied as a result for the Coronavirus outbreak we would seek to provide the following assurance.
During the Coronavirus outbreak, and for the period of Government required closure of any premises, the following policy operations will apply:
- The unoccupied building conditions within the policy will not apply for any impacted property and we will not be taking any further measures to restrict coverage.
- Should any premises remain unoccupied once any applicable Government restrictions are lifted, we would consider any such property to be subject to the unoccupied building conditions of the policy after a period of 7 days. With this in mind please note the Other Considerations section of the Risk Management advice contained herein as well as advice from your broker.
- Any inspection provisions within the policy are waived during the period of Government restrictions, other than those deemed to be required for statutory purposes.
- If during the Coronavirus outbreak, you repurpose your premises to undertake different activities please contact QBE or your broker to discuss this further.
In consideration of the above, we would also wish to advise policy holders of our best practice risk management advice for temporarily unoccupied premises during the Coronavirus outbreak.
Risk Management Advice
Equipment and Building Utilities
- Ensure all equipment is safely turned off and, in a condition, where it can be left for an extended period without damage or degradation.
- Remove from or drain processing equipment of flammable, combustible or hazardous liquids and materials. These should be appropriately disposed of or stored safely for re-use.
- Isolate electrical circuits where you can (without affecting security, CCTV or fire systems).
- Turn off the mains water supply. Make sure this does not isolate any sprinkler or other fire systems you have.
- Don’t worry too much about draining heating or other stored water systems but if possible isolate storage / header tanks from any distribution pipework.
- If it is safe to do so, isolate the incoming gas supply.
- Make a list of all services or other valves you have isolated (and where they are) to ensure you reinstate them all
- Ensure that any fire and/or sprinkler systems are fully operational.
- Carry out a check to ensure that internal fire doors are closed.
- Check that the fire alarm panel is fault free and all fire detection systems are fully operational. Waste
- Remove all external waste, pallets and empty skips ahead of closing.
- Empty all waste bins and relocate to a secure area, ideally at least 10 metres from the building. If this is not possible and bins and skips are within 10metres, these should have lockable lids.
- Carry out a check to ensure physical security measures are in place e.g. fences are in good repair, windows are locked and boarded if appropriate, shutters are in place where appropriate, gates and doors are locked, and letter boxes secured closed.
- Shop fronts with no internal or external roller shutters to have shop front displays cleared of stock.
- Make sure your intruder alarm is set and that the remote signalling is in place.
- Ensure sufficient numbers of key holders are available to respond to an alarm activation within 20 minutes, and any other building management system alarm that may be triggered.
It is also prudent to consider the following for any planned longer-term building closure;
- Awareness of vacant property management companies.
- Removal of high value or critical equipment to a secure location.
- Additional building security features (boarding windows etc).
- Further isolation of building services and draining down of wet systems.
- Clearly posted emergency contact details.
Under normal circumstances we would expect customers to be taking reasonable care to comply with warranties under their policy. Where a customer is directly impacted by Covid-19 we will make considerations in reviewing their adherence to warranties and other conditions, but in other situations we would generally expect these to be followed, if they are appropriate. For example, if a business is not open then there will be some conditions which will not apply.
Where a house such as a Holiday Let is left Unoccupied longer then 60 days normally Unoccupancy restrictions to cover apply. If, for example, a Holiday Let is left Unoccupied due to COVID19 restrictions we will consider extending the 60 day period on a case by case basis to allow full cover to continue.
Unoccupied premises, due to COVID-19 restrictions – Standard extension to 60 days
Temporary business closures have obviously increased the number of premises which are now unoccupied. These are normally at much higher risk of damage/loss than when occupied, from water damage, arson, and theft. The standard R&Q policies would define a building as unoccupied if empty, or not being fully utilised for business purposes, for a period in excess of 30 days (please check policy wording for full details).
In response to the current situation we’ve extended this period to a minimum of 60 days for premises that have become unoccupied due to COVID-19 restrictions. This means a client will not have to inform us that the premises are unoccupied or be subject to any of the policy requirements in respect of unoccupied buildings. At the end of that period the client must inform us if the premises are empty and we’ll work with them to manage the unoccupancy in the most suitable way. We will be as flexible as possible to the situation. If current restrictions on normal activity are still in force as we approach the above 60-day timeframe we will provide more information nearer the time.
These guidelines override any existing policy condition and apply to any premises that are temporarily closed due to restrictions on business or working practices resulting from COVID-19. These guidelines would not, and do not, extend to any premises unoccupied before the 16th of March 2020, nor where premises become permanently vacant – in these circumstances please contact us.
If premises do become vacant, we would recommend the following actions, all must only be undertaken in line with the current guidance issued by HM Government. www.gov.uk/coronavirus
Further guidance can also be found at: www.abi.org.uk/products-and-issues/topicsandissues/coronavirus-qa/
- Site Security – check fencing and gates are in good state of repair and working
- External lighting – movement sensors working
- Building Physical Security – check all window and door locks, and any security shutters are working
- CCTV – make sure it is working, including recording and any remote monitoring
- Intruder Alarm – check to ensure this is fully operational and maintained, including offsite remote monitoring
- Automatic Fire Alarm – check to ensure the system is fully operational and maintained, including offsite remote monitoring
- Fire doors – ensure all internal fire doors and shutters are closed
- Letterboxes should be sealed
- Inspections – where the site is operational with limited staffing, an inspection should be carried out at the beginning and end of the working day. Where the site is temporarily closed, where possible arrangements should be made for a weekly internal and external site inspection, with guidance sought as to whether this can be supported whilst adhering to social distancing
- Waste – internal and external waste to be removed from site with external storage located a minimum of 10m from the building
- Utilities (electrical, water, heating) – shutdown and isolate / drain any non-essential utility services that are not required for operational reasons, maintaining minimum temperatures to prevent freezing, or for protection
- Unattended Processes – other than unattended processes already notified to R&Q, other processes or machinery should not be left unattended. Where this needs to be considered, please supply details to us.
- Hot Work – non-essential hot work activity should stop.
- No money should be left on the premises unless kept in an approved safe
Our residential let product has a 60 day full perils clause. When a residential tenanted risk becomes unoccupied the client has the benefit of 60 days full cover before the policy restricts to fleea cover. If the client is happy with restricted cover there is no need to contact us. If the client wishes to purchase a higher level of unoccupied cover ie full perils with extended AD we can do the change accordingly. The multi premises has the same wording so the same terms would be applicable. The commercial wording is a 30 day clause however we are extending this to 60.
In response to the current situation, we have extended our residential property insurance unoccupancy period to a minimum of 60 days for premises that have become unoccupied due to COVID-19 restrictions. If current restrictions on normal activity are still in force as we approach the deadlines, we will seek to publish advice on our ongoing requirements.
The standard commercial and residential unoccupied property inspection requirements, as per the security clause, have also been extended by an additional 30 days. This extension will be reviewed towards the end of this period and a further extension will be applied if necessary. If this changes, we will update you.
If a commercial property has become unoccupied due to COVID 19 restrictions but will re-open once these restrictions are lifted, we do not need to be notified of the change in circumstances. However, if the property is unoccupied due to a change in use, this would be classed as business as usual and so we would expect to be notified of this change.
As a reminder, all new and renewed policies can benefit from the 12-month interest free Direct Debit payment option we provide.
As a Government lockdown is in force, should your policyholders decide to vacate their home for whatever reason, they need to be able to demonstrate that all available precautions were taken when leaving the home if the situation arises that they need to make a claim. We will continue to act fairly, honestly and professionally in accordance with the best interests of our customers.
All activities must only be taken in line with the current guidance issued by HM Government.
We understand that the recent circumstances are unprecedented and your usual way of trading has changed completely. All claims are evaluated on their own merits so we cannot guarantee that all incidents will be covered. We will take the current circumstances into consideration when reviewing claims.
We hope this helps to alleviate any concerns, but please let us know if you have any further questions. We understand that this is a very stressful time and so we are here to provide our support where possible.
Thank you for your understanding as we do our bit to help mitigate the risks associated with COVID-19 in these extraordinary times.
Our customers are facing enormous challenges as buildings are forced to close or operate on a limited basis going forward.
If your building is temporarily closed, due to the coronavirus and home working, we do not consider that the unoccupied building condition will apply in the current circumstances unless we have specifically advised you otherwise.
If the Government restrictions continues for a significant period, we will actively advise customers if any further action is needed. We’ve put together a checklist of risk control measures to consider to help secure buildings and to use as a reference point for regular checks during temporary closedown periods.
Risk Control Measures
- Waste: Remove all external waste, pallets and empty skips ahead of closing.
- Waste bins: Empty all waste bins and relocate to a secure area, ideally at least 10 metres from the building. If this is not possible and bins and skips are within 10m, these should have lockable lids.
- Fire Systems: Ensure that any fire and/or sprinkler systems are fully operational
- Fire Doors: Carry out a check to ensure that internal fire doors are closed
- Building Utilities: Shutdown any non-essential electrical devices and building utilities
- Inspections: Arrange for a weekly inspection of the building (internally and externally) – please remember to risk assess for any lone working issues. Please ensure that you comply with existing government guidance regarding vulnerable people and lone worker risk assessments. Consider the provisioning for alternative skilled personnel.
- Physical Security: Carry out a check to ensure physical security measures are in place e.g. fences are in good repair, windows are locked, shutters are in place, gates are locked.
- Intruder Alarm: Make sure your intruder alarm is set and that the remote signalling is in place. Ensure sufficient numbers of key holders are available to respond to an alarm activation within 20 minutes.
- Maintenance: so far as is reasonably practical, there is an expectation that essential maintenance continues with any remedial measures completed. Premises that have Building Management Systems (BMS) with remote alerts should continue to be responded to.
- If your site normally has 24 hour occupation and you wish to completely close the site, please contact Zurich for advice. We have produced separate guides for partially closed sites, schools, refurbishment and construction sites.
- Please update any relevant risk assessments, for example: lone working, that remaining site staff include trained fire wardens, knowledge of the action to take in the event of an emergency.
- With a limited staff presence, there may be a request to redeploy employees or contractors to other tasks. Employees and contractors must not be exposed to tasks for which they have not received appropriate training e.g. working at height or use of machinery