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Most works and renovation projects will have been affected by Covid-19 lockdowns and now require a policy extension. We tell our brokers how important it is to stay in touch with and give advice to private clients, to make sure that the extension applied for is for is for a realistic period of time.
The reasons for cost and time overruns are many and varied, but by no means unusual. 90% of projects require a policy extension and some more than one. It reduces the opportunity for errors if your client selects a date beyond the expected end date of the works, to allow further flexibility and reduce the administrative burden on everyone which is most often what causes mistakes.
In lots of cases we see extension requests that turn out to be too short which are driven by a number of issues, but mainly contractors not wanting to level with their clients and give them the ‘bad news’ up front. This problem is also exacerbated by urgent last minute requests for extensions, which we always underwrite, as nearly all of our catastrophe losses occur in the last third of the works.
Brokers – how to help reduce the last minute extension requests
Brokers can save themselves significant time by keeping an eye on policy expiry dates and staying connected with their clients well before the policy finishes. Staying in touch with clients through their project means that brokers can also identify if the works sum insured needs increasing; something often missed.
Not all extensions are straight forward and there may been the need for further information gathering and/or underwriting before more time can be granted, so we advise that Brokers give themselves at least a month before expiry to start negotiations. All our insurance policies currently offer a 90-day maximum cessation period and any extension to this stoppage time would need to be agreed by us.
What this means for Additional Premiums
A policy extension will incur an additional premium.
There is a perception that because no works were ongoing, cover was not required and any extension to the policy should be without charge. Sadly this is not the case, as the existing structure and works remain on risk during the period when works were in cessation. If there had been a fire during that time, we were still maintaining full cover for the property and would be expected to pay any claim.
We offer further advice on expired policies or extensions, cessation of works, pre-works periods and delays here on this website – in the form of articles, videos and FAQs. Please do get in touch directly if you have any current concerns that we can help you with.