Property insurance, whether for your home or business, is generally designed to come into play when damage is done. It helps with repairs, provides alternative accommodation and can provide emergency funding if you have to leave your property at very short notice.
There are also occasions when homes and businesses have to be evacuated for precautionary reasons, for example because there is a risk of damage because of a potential flood or building collapse. Sometimes businesses are unable to trade for a while because they are behind a police cordon after a major incident such as a terrorist attack. In these cases it is usually local authorities and the emergency services who make the decisions about people needing to evacuate their premises, and they have a duty to help ensure people have some temporary accommodation.
Insurance is therefore not designed to be a first port of call during an evacuation situation, but it may still be able to provide some assistance. You can read more below.
Businesses
Business insurance is more complicated than home insurance given how varied different businesses can be. As well as insuring their premises, fixtures and stock, businesses may choose to insure themselves against cyber attacks, business interruption and denial of access. A bespoke package is often put together for a business by an insurance broker. You can read more about business insurance here.
Whether firms are able to make a claim in an evacuation scenario will depend on the level of cover they originally decided to purchase. In many evacuation circumstances, this should include cover for not being able to trade, even when there hasn’t been any damage done to the business in question. This is usually provided by non-damage denial of access cover; business interruption policies also cover loss of trade but generally come into effect when there’s been an incident which has caused damage to the property or surrounding area.
The situation differs if a business has suffered loss of trade in the wake of a terrorist incident. Pool Re, a government-backed reinsurance scheme, was originally designed to ensure businesses damaged by terrorist attacks could access insurance. However in the wake of a number of incidents which led to businesses not being able to trade, despite not having been damaged, the Pool Re scheme was extended to help increase the availability of non-damage business interruption cover in these scenarios. A business will still need to have bought the appropriate level of cover in order to be able to make a successful claim.
Residents
Increasingly, insurance companies proactively identify customers in areas which are being affected by severe weather or by an evacuation scenario and may proactively reach out to customers to offer advice and support. If you don’t hear from your insurer during an evacuation scenario it doesn’t do any harm to tell them what’s happening, but there is likely to be limited potential for you to make a claim if your property remains undamaged.
A decision to evacuate people from their homes as a precaution is generally made by the local authority or emergency services, and they take the lead in ensuring those affected have somewhere to stay in the interim and may help with any expenses you have incurred whilst you were unable to be at home. Providing your home remains undamaged, there is nothing to claim against on your home insurance policy. It does remain in force and you can expect to be covered in the usual way if, for example, your property was targeted by thieves whilst you were evacuated, or suffered other damage during the evacuation.
Any other questions?
If you are unsure about what you will be covered for in the event of an evacuation or property damage, we always advise to speak directly with either the broker who arranged your policy or the insurance provider as individual policies and the insurer’s response may vary.