Construction site and commercial property owners –temporary closures during the lockdown
5th June 2020
The lockdown has led to many construction sites and commercial properties being closed – and this can have insurance implications. Below, our guidance on some of the key considerations regarding this.
If you’ve had to close your construction site temporarily following the lockdown, your first port of call should be to check your policy’s terms, conditions, and exclusions, as a ‘stoppage of work’ or ‘cessation of work’ condition may apply.
The specific policy requirements and the conditions can vary significantly from one insurer to another, so we can’t list the conditions word for word for you to check.
However, you’ll need to be aware of the following:
The period that your site can remain unoccupied before you need to inform your insurer is typically 30, 60 or 90 days, however in some instances, insurers may require notification early in the period of cessation.
If you have Contractors All Risk insurance, the warranties, conditions or exclusions that apply while the site remains closed may include a requirement, for example, to remove any unfixed materials or secure plant/tools. You may also need to get someone to inspect the site at regular intervals, such as every 7 or 14 days.
Many insurers are now providing wider temporary cover for closed sites due to COVID-19 – it’s worth enquiring with your broker regarding this.
Office/property owners and business premises
If you have closed your offices or business premises and they remain temporarily unoccupied, you should follow the same procedure for construction site insurance and check your policy’s unoccupancy terms, conditions and exclusions. You should also check your policy if you are a property owner and your tenant has temporarily vacated your property.
Policy terms, conditions and exclusions will be similar, for example:
- The period that your property can remain unoccupied before you need to inform your insurer is typically 30, 45 or 60 days. However, this will vary from policy to policy.
- The warranties and conditions that apply to your property’s insurance while it remains unoccupied may include a requirement, for instance, to turn off and drain the water supply. You may also need to get someone to inspect the property at regular intervals, such as every 7 or 14 days and ensure that the letterbox is sealed up. It is useful to record details of those visits.
- Typical restrictions to the extent of cover that may apply to your property’s insurance while it is unoccupied include escape of water, malicious damage or theft.
- Again, some insurers are providing wider temporary cover for premises vacated due to COVID-19, so consider speaking to your broker regarding this.
Further questions and more information
If you need more clarity about the cover you have, or if you’re unable to comply with any of the policy’s terms and conditions, do speak to your broker – CLEAR and MPW teams are working from home, and available as usual to assist our customers by phone and email.
Given the exceptional circumstances, certain insurers are being more flexible concerning adjustments to cover and premium payment methods – so it is certainly worth having a conversation to discuss whether this applies to you.