Concerns that commercial policy exclusions for unoccupied premises will be triggered by coronavirus shutdowns have caused underwriting agency SUA to address the issue in the Lloyd’s market.

Authorised representative Peter Cross, who specialises in hard-to-place commercial property risks, says two syndicates he deals with have agreed to wordings that will ensure greater transparency and certainty for clients in the current environment.

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 told insuranceNEWS.com.au.

“With what has happened with the coronavirus it is going to be more of an issue going forward because there are going to be a lot more businesses that are forced to close down for longer than 30 days.”

The new wordings would waive a vacancy exclusion when government requirements cause the closure of the business, subject to certain conditions.

Those include turning off utilities, except for security and fire protections, and checking the property is secure on a weekly basis.

“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,” he said.

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

“The underwriters have a duty to their insureds to help them out through this time,” he said. “If you look at the banks, they are helping out clients through deferring loans and things like that.

“At the end of the day, the insurers really need to maintain that continuity of cover for their clientele.”

Mr Cross, who founded Commercial Underwriting Agency in 2018, was previously National Commercial Property Manager at Liberty International Underwriters.