Mind the language
The wording in your insurance policy always needs extra attention, advises Carrie Arnold of Bridge Insurance Brokers Ltd.
You’ve carried out your assessments, filled in the forms, done the math and you’re happy with the price. It sounds like a done deal and the perfect policy for protecting your property.
But it’s wise to err on the side of caution and take more time looking at the wording around the terms. We’ve worked with some of the best insurers around the world and we know that they all operate in slightly different ways. Are all property owners’ policy wordings consistent? In a word, no.
Definition of terms
For example – what is your policy’s definition of unoccupancy? Does it count the building as a whole or is it divided into sections? If one part of the property is unoccupied will your insurer treat the whole property as unoccupied? What does this mean for you and for the rest of your tenants? Will your insurer look to increase the premium or reduce the covers? This element needs to be crystal clear from the outset as it has a massive impact on property owners with multiple occupancies.
If part of your property is unoccupied, are there any terms or conditions regarding the management of unoccupied sites? There may well be warranties or conditions that you have to adhere to, such as inspecting unoccupied sites, maintaining the roof etc. Part of this will mean proof so it is important to check that you have in your possession sufficient records.
Communication is key
There is an element of trust in the tenant / landlord relationship and you need to know that your tenants are honouring the terms of the insurance through their behaviours. However, it is your responsibility to communicate those terms to your tenants. It’s worth considering a method to encourage them to honour the terms as part of their contract, to ensure there are no issues in the event of a claim.
Look for the benefits
Does your policy offer additional benefits – or mention partner products that may assist you in the management of risk on your sites? This could be to do with an average waiver for keeping your Building Declared Values up to date; discounts off fire suppression systems; or agreed reduced rates for temporary security solutions – all of which could help you better protect your site.
Multiple occupancy buildings mean extra time is definitely needed when going through your property insurance policy. But even single property insurance can make for muddling reading and an insurance broker will help you navigate the terms and highlight any areas of concern, negotiating modified terms as and when needed.
The devil really is in the detail and a broker’s expertise goes beyond price.
For more information, please contact:
You can return to our news section by clicking here.