Unoccupied Properties due to Covid-19 Lockdown

With many properties, offices and other workplaces shut down over the recent months; you’ll no doubt be aware that many insurers made changes to their usual unoccupancy terms on their policies covering a property. The definition of ‘unoccupied’ will vary between insurers, so if you are unsure whether your property is classed as unoccupied, please speak to your usual A&T contact, and they can advise you of your insurer’s stance.  

A property insurance policy will often provide cover should the property be left unoccupied or if it’s not fully utilised for its usual purpose for up to 30 days. Following these 30 days, it’s common for various terms to be applied to your insurance policy that need complying with.

Most businesses began to close on 16 March 2020 and many insurers were quick to support their customers who had been unduly penalised for temporary closures solely due to the COVID‑19. Their response was to extend their unoccupancy period to either 45days, 60 days or in some cases up to 90 days.

You will likely have seen the government announcements regarding the opening of shops and various other businesses from 15 June 2020. With this news, multiple insurers have taken different stances on their unoccupancy conditions, and as such, we urge you to get in touch so we can help advise you on where you stand.

Unoccupied before 16 March or now permanently closed business

If your business remains compulsorily closed due to the government’s lockdown, many insurers are extending their unoccupancy period for a further period with no compulsory terms being applied to these policies. However, if your property was unoccupied before 16 March 2020 or if your business has now permanently closed leaving your property vacant, you’ll likely have specific terms that you’ll now need to be able to comply with.

Temporarily closed and not reopening on 15 June 2020

Most insurers are expecting businesses that have been temporarily closed over the last three months to reopen on 15 June 2020 when the government’s lockdown eases slightly. There will be some businesses where closure is not mandated and don’t feel ready to open just yet. In these instances, most insurers are likely to be applying the unoccupancy conditions of the policy.

Your insurers will likely need to make some changes to your policy and, it would not unusual to see:

  • either increase the premium charged or restrict the perils covered
  • require the removal of contents or stock from the premises.
  • need you to seal letterboxes
  • require the water supply to be isolated at the mains and all systems drained down

Standard unoccupied property insurance terms

  • TURN OFF/REDUCE THE MAIN SERVICES by turning off the water system except for the supply to any sprinkler system and ensuring electricity is only in use to maintain any fire or intruder alarm system(s) that are in operation.
  • REMOVE ANY FIRE HAZARDS such as any stores of combustible materials.
  • SECURE THE BUILDING by closing all doors and windows and setting all security locking mechanisms, setting any alarm system(s) and any other protective device(s) that are in operation.
  • WEEKLY INSPECTIONS are carried out thoroughly internally and externally by a responsible person, and a record is maintained of such inspections. If you are not able to inspect your unoccupied premises, then please let us know as soon as possible so that we can agree on an appropriate action plan with you and the insurer.

Unoccupied property checklist

We have drafted a short checklist that you can download and use to help keep your unoccupied property protected during this current challenging period.

Download your checklist here.

Unoccupied Property? Check your policy!

If your property has been unoccupied and you are not reopening on 15 June 2020, you must comply with the unoccupancy terms of your policy. Please get in touch with your usual A&T contact today or call us on 01202 754900 and we will provide you with your insurer’s unoccupancy terms and what you need to do to ensure you remain protected.