1st December 2022
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Dark clouds will be gathering as winter rolls in, and some will hover over insurance claims, rather than announcing the arrival of the latest ‘named’ storm.
There is a stark bad-weather warning for all commercial property owners to heed: ensure your policy takes the same view of a storm claim as yourself, or your claim could be repudiated.
The definition of a ‘storm’ matters. Your policy may offer one, but if not, it leaves things open to interpretation – not necessarily advantageous. However, most insurers would apply the Insurance Ombudsman’s definition. That relates to not just wind, but also hail, torrential rainfall and snow.
Typically, for something to be a storm in insurance terms, it requires winds of around 55mph, torrential rainfall of at least 25mm per hour, snow of at least 12 inches falling within 24 hours and hail intense enough to break glass.
In a storm claim, you may struggle to prove such conditions prevailed in your particular location, on the given date. You may have to access localised weather station reports. Just asserting there was a storm in the wider area may not suffice.
Take note. An insurer will typically not pay out if they believe damage was caused over time. Storm claims for damage, which actually emanate from poor maintenance and failure to address known property issues, will also not be paid.
Many policies contain a Reasonable Care clause, expecting the property owner to keep their building in good condition and remedy any defects. They may also have a specific Flat Roof Condition, requiring regular flat roof inspections by a professional roofing contractor. A buildings insurance policy does not cover general wear and tear. Be cautious too about your liability to others. Fail to carry out repairs and then damage something, or injure someone, and it could lead to a liability claim against your business.
Evidence is often key to successful claims. When damage occurs, it should be collected in the form of photographs and videos, with a full list of damage provided. Keeping receipts, to prove maintenance has been carried out, is helpful. Similarly, take care not to throw away damaged items after a storm, unless they are a health risk.
Finally, storms could catch you out in another way – and not because you’ve forgotten to buy emergency batteries. If you are underinsured when the claim is analysed, the insurer could either
turn it down entirely, if they felt the underinsurance a deliberate act, or apply ‘average’ to it, deducting from your pay- out a sum that reflects the percentage of underinsurance. That could be a hard financial lesson to learn.
Remember also that getting your sums right is vital for business interruption cover. If storms force you out of your premises, closing your business, the last thing you want is for your business interruption cover to be jeopardised, simply because you have got your sums wrong through incorrectly declaring your turnover requiring insurance protection.
Let a broker guide you through all of this and you should ride the storm well.
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