All pubs around Australia are into their eighth week of being forcibly closed by government mandate, but many have clauses in their insurance that may render it invalid after only one month not trading.
At around 3am on the morning of Saturday, 9 May, a trio of young males casually passed by the iconic Dick’s Hotel of Balmain, which had been resting dormant for the prior 48 days under the force of the pandemic shutdown.
For reasons known only to them, at least one of the men decided to ‘tag’ the pub in at least four places, spray-painting meaningless graffiti for the owners to remedy.
In potentially similar circumstances, on Tuesday (12 May) a fire mysteriously broke out at the Woden Hotel in the ACT, with multiple crews battling the blaze for around an hour.
The Hotel was closed due to the pandemic, and there were no occupants nor reported injuries.
But both businesses could potentially find their regular insurances will not cover the damages as the premises have been ‘unoccupied’ for more than 30 days.
In insurance circles the term Unoccupied, while not holding a specific definition, is largely understood to mean not trading. It does not require the premise to have been actually vacated.
Every insurer has their own specific policy wording, and interpretation and knowledge of the clauses is limited given active businesses are not typically shut for extended periods.
“Some cover unoccupied properties for up to 30 days, most are 60 days, and there are some insurers that will go up to 90 days,” says Allan Sudale, representative for Reliance Partners insurance brokers.
“The insurer can possibly go longer, but the client needs to apply for the extra cover and there may be an additional premium to pay as well.”
Sudale has worked in business insurances for more than a decade, specialising in the increasingly competitive and high-premium sectors of hospitality and commercial property, amongst other things. He has also owned and operated pubs, and counts local and national clients on the books.
“One of the biggest risks I’m seeing at the moment is for pubs that have been unoccupied for more than 30 days. When a property is unoccupied the risk to the insurer and the pub increases dramatically, from theft, vandalism and property damage.”
NOTE: Sudale says the information above is general advice only and does not take into account the objectives, financial situation or needs of any person. Before making any decision, you should consider whether it is appropriate in light of your particular objectives, financial situation or needs, and seek qualified advice on individual circumstance.