Now online - new resources section with key updates & FAQs on Renovation Underwriting policies affected by Covid-19. Take a look
In the property renovation sector, security and protection has come to the fore with many projects being stalled or mothballed until the lockdown and social distancing rules have been rescinded in the UK. This has created some confusion over what is considered a safe and secure site, and whether workers or the owner are legally able to enter the property.
For many Brokers, the uncertainty among their clients about the status of unoccupied renovation sites during the lockdown has led to questions about short- and long-term insurance provisions for their building work to ensure they meet their legal obligations and liabilities.
Here, we look at some of the main areas of concern and provide some guidance to both our Broker network and the advice they can give to their clients.
Essential work only
For most clients, all non-essential renovation work has already been stopped aside from any work that may be needed to achieve a secure and weatherproof site. Once secured, the only reason to access a site should be for emergency or critical work. Required inspections may also continue if practical to do so within Government guidelines.
Hayley Lorimer, director of membership services at the Federation of Master Builders (FMB), said: “Any work that is required to achieve a secure and weatherproof site with materials safely stored counts as critical work and can be carried out, whilst taking all possible precautions as per NHS advice.”
According to the Construction Leadership Council, this work includes making good unsafe buildings; such as dangerous structures and roofing, safety work for gas or electricity, drainage issues with associated health risks, lock replacements, and glazing work where not doing so would cause weather damage. A full list can be found on the Construction Leadership Council website.
Site safety and security
The UK Government’s Health & Safety Executive’s (HSE) Construction Design and Management Regulations 2015 (CDM 2015) state that there is a duty of care for the principal contractor to ‘take reasonable steps to prevent access by unauthorised persons to the construction site’.
The FMB recommends a whole raft of advice to make sure a renovation site is safely secured - including adequately sized fences and hoarding, CCTV and security lighting, and security notices. Take a look at the comprehensive list here.
The importance of a Broker-Client Dialogue
Brokers should, as part of their service provision, regularly check with clients to ensure that any changes or modifications to the renovation project such as security, fencing or hoarding, intruder alarms, locks and security lighting, plant and materials storage are updated. For example, if the property ends up under temporary security protection (such as boards and sheeting to cover missing exterior walls or roofs), brokers should advise clients that the contents insurer needs to be aware of such changes, as failure to do so could invalidate the policy. One simple call can save a lot of grief in the long run. It’s also important to have a conversation with clients about any unfixed building materials - the perfect example being a new kitchen sitting in boxes in the hallway.
A property that is pending works, that is on cover with a standard insurer and has been vacant for more than 30 days, is defined as an unoccupied property. It will need to be insured as an unoccupied property not undergoing works. Our Renovation Unoccupied product is available to insure properties that fall into this definition. A further works quotation would be needed from the underwriters before work recommences.
All Renovation Insurance policies also include a cessation of works clause, meaning that clients continue with the same level of cover for 90 days - provided water, electricity and gas are switched off (unless for alarms or heating). The water also needs to be drained.
Builder’s Public Liability insurance should also be in place throughout, until practical completion of all building work.
We know that this is a challenging time for Brokers and the Renovation projects on hold for both private clients and commercial businesses. That’s why we’ve created a brand new resource for the Brokers in our network – highlighting key FAQs and insights for Renovation Underwriting policies affected by Covid-19.