Has your Unoccupancy Cover Changed?

The continued restrictions that have been put in place to fight the coronavirus have had a drastic impact on UK businesses, particularly within the retail, food, leisure and hospitality sectors. These closures raised concerns within businesses and insurers due to the number of unoccupied buildings suddenly skyrocketing, without a clear end date in sight. Now many small businesses have been given the green light to reopen their doors to the public.

Reviewing your unoccupancy cover
Whether your business is reopening in the near future or if you’re having to remain closed until further restrictions are lifted, it’s important to take note of how your unoccupancy cover could be affected if your business premises has previously been out of use.

Over the last few months, many insurers have extended their unoccupancy definitions or have excluded the period of unoccupancy which was directly related to COVID-19 from the agreed term. As the lockdown is gradually being lifted, insurers are now looking to update their approach regarding unoccupancy in reaction to these changes.

Unoccupancy cover for compulsory closure
If your business remains closed due to Government guidance, your unoccupancy cover will likely remain in place pending further reviews. This will apply to tattoo parlours, nail bars, gyms and so on. However, if you can open but have chosen not to take that step for your own reasons, you will need to confirm how this will affect your cover in accordance with your policy’s terms and conditions.

Leading insurer, AXA’s, latest update states that if a business is not remaining closed under the country’s Health Protection Regulations until 15th July, standard unoccupancy cover terms applied from Monday 15th June 2020. This means that if an AXA policyholder chooses to remain closed or opens their doors on that date, their cover will be restricted to standard unoccupancy cover restrictions.

Often, insurers tend to go in a similar direction after one has taken the lead so it may be that other insurers follow a similar trajectory.

It’s important to get in touch with your insurer or broker to understand exactly what you’re covered for.

If you have any questions about the items raised, please email Stephen at sb@ironmarketgroup.com or call 01782 461563.

Stephen Burns
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