The insurance claims experience in respect of unoccupied premises and premises where normal trading has ceased is very poor, particularly in respect of Theft and Malicious Damage but also in respect of Fire and Burst Pipes. In consequence, it is often impossible in an open market situation to obtain cover for such risks and even if insurance cover is obtained, the terms are onerous and the premiums high.
Willis have negotiated, under this facility, cover for unoccupied premises and premises where normal trading has ceased for the same perils as for occupied buildings, subject to the Code of Practice below being adhered to:
a) within 30 days of the appointment if the buildings are unoccupied at the time of appointment
b) within 30 days of the buildings becoming unoccupied
Code of Practice
1. All water supplies shall be turned off at the mains and the system entirely drained down, except where required for a sprinkler system (see note 2 for requirements where a sprinkler system is present)
for the period 1 November to 31 March inclusive the heating system shall be kept in operation.
This requirement applies whether or not a sale of the building or disposal of the lease has been negotiated.
2. Any sprinkler system should be kept in operation subject to weekly tests being continued.
a) for water filled systems, the heating must be kept in operation for the period 1 November to 31 March inclusive. If it is not possible to maintain the heating you should contact Willis for further advice in order that full cover can be provided.
b) for combined air and water systems, the system should be air filled for the period 1 November to 31 March inclusive.
3. All gas supplies should be disconnected unless used to heat the premises.
4. All electricity supplies should be turned off at the mains unless required to maintain fire and/or theft protection/detection equipment. They may of course be reconnected for visits to the property.
5. All fire and theft protection/detection equipment shall be maintained in efficient working order and put into effective operation whenever the premises are closed for business. Existing maintenance contracts on such equipment should be continued.
6. All letter boxes should be completely sealed to prevent any insertions.
7. Night watchman/security patrols are recommended generally and will be insisted upon in certain circumstances.
8. The premises should be cleared of all combustible rubbish/waste.
9. a) With regard to Premises in Area A. (as detailed in 4.6 of the Willis Insolvency Manual, list of areas for code of practice).
i) All basement, ground floor and other accessible windows and glazing to doors to be securely boarded up and the premises be inspected internally at least once during every 14 day period by a representative of the practitioner unless otherwise agreed.
ii) A professional security firm be engaged to permanently occupy the premises.
9. b) With regard to premises in Area B (as detailed in 4.6 of the Willis Insolvency Manual, list of areas for Code of Practice).
i) All basement, ground floor and other accessible windows and glazing to doors to be securely boarded up and the premises be internally inspected at least once during every 14 day period by a representative of the practitioner unless otherwise agreed.
ii) To be internally inspected regularly at intervals agreed with Willis or otherwise every other day.
Premises previously occupied solely as Offices, Hotels, Private Dwelling Houses or Motor Vehicle Showrooms immediately prior to the appointment of the practitioner are exempt from 9 above.
With regard to premises which were previously occupied solely as Offices, Hotels, Private Dwelling Houses or Motor Vehicle Showrooms, full details of security should be provided to Willis for representation to the underwriters for their consideration.
There will be cases where further protection will require to be implemented. This is particularly so in the event of long term unoccupancy and in areas with an adverse loss record. It is recommended that there be specified discussions with Willis in respect of such properties.
Particular care should be taken to maintain and operate all existing security protections and to implement any additional ones that the situation requires (for example night watchman/security patrols).
It should be noted that insurers are prepared to negotiate where these terms cannot be complied with.
IF YOU CANNOT COMPLY WITH ANY PART OF THE CODE OF PRACTICE, IT IS ESSENTIAL THAT WILLIS ARE ADVISED IMMEDIATELY, IN ORDER THAT THE PARTICULAR CASE CAN BE DISCUSSED WITH INSURERS AND AGREEMENT REACHED AS TO WHAT PRECAUTIONS SHOULD BE EFFECTED.