LOCKDOWN LEFT OFFICES EMPTY
Change in work creates a change in risk as lockdown left offices empty Jonathan Guard, Director, Commercial Insurance at LexisNexis Risk Solutions, UK and Ireland The Government has urged office workers across the UK to get back to their desks. However, London and other major commercial hubs that became ‘ghost towns’ during lockdown remain largely unoccupied. Ironically, many commercial property insurance providers with city offices currently remain in ‘working from home mode,’ leaving their own offices largely unoccupied as they endeavour to understand the changing risk of the commercial properties they insure. The risks associated with empty premises versus those that are occupied are very different. There can be a greater risk of vandalism and burglary. The European Parliament in Brussels was victim to a lockdown burglary, and closer to home, Police Authorities have been urging businesses to ramp up their security measures . Arson is still one of the leading causes of fires on commercial premises . These claims are generally much higher in cost than fires started for other reasons because they often occur when a property is vacant and the fire has time to spread. Fire claims submissions have, according to a recent report , seen a spike of 40% between 1 May to 11 June 2020, with commercial property including outbuildings and outside areas accounting for 63.4% of total fire claims.
In addition to opportunistic crime like arson, insurance providers must now factor for the risks associated with problems emerging in the insured building, such as escape of water or electrical fires, which may go undetected for much longer than if the building was occupied. The risk of claims fraud also needs to be considered as Government support measures ease back and firms face increasing financial pressure. Throw into the mix an extreme weather event, further lockdowns potentially hinder the ability to fully investigate claims, and the risk of fraud becomes even greater. The market is very conscious of the fact that many businesses whose employees were able to transition to home working will be paying for their workspace and associated insurance even though the space is not being fully utilised. They will be looking for solutions from the insurance sector and from the commercial property market to help them get back on their feet and operate with potentially lower overheads and reduced physical presence. At the same time, insurance providers must protect themselves from potentially rising claims costs in order to deliver premiums at a price businesses can afford to pay. They need to get a comprehensive, multidimensional view of risk in an instant. It requires a combination of data regarding the characteristics of the property; its location; the individuals behind the business;
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