Variation of Risk and Cancellation clauses - what you need to be aware of.
Have you ever left your property unoccupied for longer than 60 days?
Did you know that most property insurance policies (Home, Landlords and Business Insurance), have clauses enabling the Insurer to avoid your risk if you have varied or changed the risk profile significantly enough that they can prove they would not have insured your property in those circumstances?
You have a contractual obligation to notify the Insurer at renewal of the policy, and any other time where a change to your risk profile may increase the possibility of loss, damage or liability to that originally disclosed, prior to policy inception (or at renewal).
Common Examples include;
Building Unoccupied beyond the period of time specified in the policy wording
Alterations to the Building beyond the value of works specified in the policy wording
Change of Your/ Tenant Occupation
Operation of a Business at your Home
Non-Disclosure of a Change in Risk, can result in a Claim not being paid and/or in some circumstances the Insurer can apply on Section 60 (2) of the Insurance Contracts Act to cancel a contract of general insurance.
Why use an Insurance Broker?
We believe that most business owners need expert advice to recommend the best polices that suit your specific needs across a broad spectrum of Insurers and policy wordings.
It is not possible for a business owner to make the most informed decision by dealing with a handful of direct insurers.
You also need access to an insurance professional who will keep in regular contact with you to prevent a change in circumstances leaving you uninsured.
If you deal directly with an insurance company, ask yourself did they advise you of these potential issues?
Does your insurer stay connected with you in order to keep up with changes in your home or business circumstances?
By Lisa Paradiso
Head of Broking (Perth Office)