Coronavirus (COVID-19) & Commercial Property Insurance
Amid the enforced and devastating shut-down of businesses like gyms, restaurants, bars, salons and retail, many properties could sit empty for a long period of time. During these COVID-19 shut downs, there may have implications for commercial property insurance cover.
Insurance companies see unoccupied premises as a higher risk due to the increased likelihood of break-ins, fire, vandalism and water damage. Under the Duty of Disclosure section of the Insurance Contracts Act (1984), if a property is unoccupied over a certain period of time, it becomes the insured’s duty to disclose to their insurer anything that may increase or change the risk at the property such as the property being left unoccupied.
In the event this is not disclosed to an insurer, there is the potential for insurance claims to be denied by the insurer.
What are your obligations?
Generally, insurers provide cover for 30 days of continued unoccupancy but may also apply additional terms and conditions depending on the insurer. Some policies can allow 30, 60 or even 90 days. At this time the policy may still provide protection, but be limited to restricted events, while others completely exclude cover if the insurer has not been advised of this change in risk.
With many business premises forced to close temporarily during the COVID-19 pandemic, it is important to be aware of your obligations, and notify your insurance broker and insurer if this applies to you. Take the time to check both your policy and with your tenant how long the property will be unoccupied.
If you have any questions about your insurance cover, please contact us on (07) 5482 7485. We’re here to help!