Insurance Concerns for Long-Term Remote Operations
Jennifer Costanzo, CRIS® - Promark Assoc. Agencies, Inc.
When the call came to transition our workspaces to our homes, we all did so with the grace and flexibility of a contortionist. Conference rooms became digital and conversations around the water cooler were swapped for instant messages and texts. Our commercial spaces, rented or owned, left eerily quiet and bereft of the buzzing energy of our businesses. Even as we’ve been cleared to start re-entering our offices, many companies have chosen to extend work-from-home policies for their employees.
Our collective focus has been on maintaining a high level of service and balancing the myriad responsibilities when life is home and home is work. Although the office itself may not be at the forefront of our minds, the space deserves attention. Unused spaces can be very attractive to uninvited guests – humans and pests alike. Care should be taken to ensure that security and protective measures are in place and maintained.
In addition, the insurance covering your business property may be impacted by clauses governing occupancy in your policy. Not all policies are alike and your policy in particular should be reviewed, but, in general, if your space (the whole building if you are the owner, your leased space if you are a tenant) is not used for at least 31% of its customary business, it’s considered “vacant” by your carrier and will trigger the “vacancy provision”. In a nutshell, if your space remains “vacant” for more than 60 days, the policy will not cover losses caused by theft, attempted theft, glass breakage, water damage, vandalism and sprinkler leakage. All claims caused by other perils will be reduced by 15%.
During the active period of the lockdown and prior to the reopening phases, some carriers suspended the vacancy provisions in their policies to accommodate already overwhelmed business owners. As we entered reopening phases for most of us, carriers lifted those suspensions and the countdown began.
If you are continuing your work-from-home policies, temporarily or longterm, and are concerned about the impact to your coverage, I encourage you to review your policy and give us a call to discuss.