Underwriting agency SUA has pursued policy changes in the Lloyd’s market to ensure clients are not left without cover if properties are unoccupied for an extended period due to the coronavirus outbreak.

Wordings agreed with two syndicates will waive a vacancy exclusion when government requirements cause business closures. Conditions include turning off utilities except for security and fire protections, and checking the property is secure on a weekly basis.

SUA authorised representative Peter Cross, who specialises in hard-to-place commercial property risks, says the move will ensure greater transparency and certainty for clients in the current environment.

“Everyone is looking at the moment at what is covered and not covered,” he told insuranceNEWS.com.au. “With what is going on now, there are going to be a lot of businesses that potentially will be unoccupied or vacant for a period of time.”

Most commercial property policies have exclusions if a premises is not occupied for 30 days and require the change to be notified and agreed with the insurer. Some 60-day and longer timeframes are also available in the market.

“It is not that I think insurers will generally say ‘that is not covered’, but I think it is good practice to make sure we get things into the policies now in preparation,” Mr Cross said.

“In these difficult times you don’t want people to start cancelling policies mid-term because they believe they have no cover because they have premises that are vacant.”

Mr Cross says it will be important for insurers to show flexibility and maintain continuity of cover for clients as circumstances change and businesses assess their options.