Brokers need to ensure that the negotiate sufficient cover to protect empty properties
As anyone dog or cat owner will tell you, fleas can cause at best an irritation (no pun intended) or acute embarrassment when friends or family come around. With the appropriate treatment however, the pesky creatures can usually be eradicated satisfactorily.
Within our industry, we have our own irritation with fleas, or more specifically, FLEA, which tends to invade unoccupied properties to almost epidemic proportions. As most brokers will testify, when requesting cover for an unoccupied property, underwriters quickly point out the restricted cover to FLEA perils only.
As we all know, the tendency in recent years has been to offer commercial all risks cover for standard commercial property insurance, and to modify this back to the more traditional specific perils when seeking to restrict cover. Consequently, we see fire, lightning, aircraft and explosion as our FLEA perils, or do we? What about earthquake, or indeed subterranean fire? Even the most prudent of underwriters would struggle to convince brokers of the additional risks posed by unoccupied properties to either of these perils.
It is imperative that a comprehensive risk management programme needs to be in place to satisfy insurers when considering the extent of cover available and we understand the particular issues around water damage, theft and malicious damage, coupled with the need for regular property inspections etc, but there are far less issues with subsidence, riot fire or even impact damage.
In the current economic climate, we are seeing an increase in the number of unoccupied properties, but as brokers, we need to ensure that we can negotiate sufficient cover to protect our clients’ assets, and this should include a challenge to underwriters who rely upon FLEA as a matter of course when faced with a request for cover on an unoccupied property.
Brokers can sometimes negotiate the inclusion of some of these additional perils on a buy-back basis, and some schemes will provide full cover for selected unoccupied risks, but my question remains, what do we actually mean by FLEA perils; has it become convenient to rely on the acronym without a reasoning behind why it is acceptable to provide explosion cover but not earthquake — or is it the other way round?
Rather like cats and dogs, we would be better off without fleas, but we must also resist any alternative suggestions based on fire, lightning, impact, explosion and subsidence.
Steve Foulsham, head of technical services, Biba