COVID-19 – Unoccupancy cover update from JRP

16 July 2020

As businesses are reopening post lockdown, many insurers are reviewing the wider unoccupancy cover given during this period. Please see a bulletin below from JRP, regarding its change in stance, which will come into effect from 31st July.

Cover will revert back to standard unoccupancy conditions from 31st July, however JRP will consider cases where further unoccupancy is needed due to the COVID-19 pandemic on their individual merits.

Cover for businesses and premises that continue to be unoccupied after 31st July 2020, due to lockdown, staff furloughing or working from home as a result of COVID-19.

The continued temporary closure of many businesses due to the COVID-19 lockdown has significantly increased the number of unoccupied businesses and buildings. These buildings have a higher risk of damage/loss from various causes, such as water damage, arson and theft, than when occupied.

Our standard commercial policy defines unoccupied when the premises are closed for business for a period in excess of seven consecutive days or when the premises (or part thereof) are untenanted and/or not resided in excess of 21 consecutive days for our property owners policy.

In response to the current situation, we have supported all existing customers who had to close their businesses due to the COVID-19 lockdown, by extending the unoccupancy definition until the 31st July 2020

As lockdown restrictions begin to ease and economic and social activity increase, we are further updating our approach to the unoccupancy conditions.

Premises that are compulsorily closed

Firstly, we would like to assure all existing customers whose businesses remain 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), that we have extended the unoccupancy definition up to and including the 31st July 2020.

Businesses where the insured has chosen not to reopen the premises

For businesses where closure is not mandated, but the business remains closed beyond the 31st July 2020 then the risk MUST be referred to JRP.

For the avoidance of doubt, businesses and premises that are mainly occupied (50% or more of the building or site) or partially open (for example a restaurant providing a takeaway service, or premises that are occupied one or two days per week), will not be regarded as empty/unoccupied.

We will treat each case individually depending upon the future intentions for the business/premise however it is likely that our standard unoccupancy condition PO32 or CP32 as detailed below will apply.

Unoccupancy Restricted Perils

When any Building(s) (or part thereof) are Unoccupied:

1. Cover under this Certificate will be restricted tothe Defined Perils of fire, lightning, aircraft and explosion.

2. You must comply with the requirements a) – i) below otherwise all Damage arising from or caused by the Defined Perils of fire and explosion will be excluded.

You must ensure that;

a) all gas, water and electricity mains supplies are kept disconnected (except those supplies required to maintain automatic sprinkler installations, lighting or alarm systems which are to remain in operation for security or fire protection purposes)

b) all water tanks, apparatus, pipes and heating (except those required to maintain fully functional automatic sprinkler systems) are drained down

c) The following minimum protections are in operation:
i) all doors and windows are securely locked and fastened
ii) any letter boxes are sealed
iii)  all security and alarm protections are set in full operation and are in proper working order

d)          
i) When the Premises first become Unoccupied You or Your nominee must carry out a detailed inspection of all doors, windows and other access points to ensure that they are secure against unauthorised entry and document both the inspection and any action required.
ii) Thereafter, You or Your nominee must inspect the Premises every seven days, keeping a written record noting any damage or breaches in security. If measures taken to prevent further damage or breaches in security have proved inadequate, improvements must be made and documented.
iii) If unauthorised entry or attempt thereat is detected more than three times in any one Period of Insurance, immediate notice must be given to Underwriters 

e) all loose or moveable combustible items or materials other than fixtures and fittings are at all times removed from the Buildings and cleared from the Premises

f) all waste or refuse is removed from the Buildings and cleared at least once a week from the Premises

g) tanks containing fuel or other flammable liquids are drained and purged within 7 days of the Buildings becoming Unoccupied

h) the Buildings are inspected at least once every 7 days by You or Your nominee in order to inspect the Premises both internally and externally and to carry out any work necessary to maintain the above security arrangements. A record will be kept of such inspections

i)  immediate notice is to be given by You to Underwriters when any untenanted or Unoccupied Buildings (or part thereof) is again occupied.

If you are unsure which of your clients and cases that CLM has placed with JRP,  please don’t hesitate to get in touch with a member of the team.

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