QUALITY INN PLYMOUTH REPEATED ARSON INCIDENTS INSURANCE IMPACT Arson Prevention Forum 24 September 2015 Rob Dakin CFPA (Europe) Dip, CBCI Risk Control Manager – Property AXA Insurance 24 September 2015

Quality Inn - Plymouth

During the operational period of any large premises, it would be normal for the premises to be risk surveyed either by the building insurer, occupiers insurer, or both This would be a comprehensive inspection by either in-house insurer surveyors, or in some cases to be outsourced to a separate organisation The survey consists of assessment against all “perils” insured but the main areas would be:  Fire  Lightning  Storm  Flood  Theft  Material damage to premises and any subsequent business interruption  Liabilities (employers, public, products and property owners) Insurance cover for a large operational hotel 3 |

Focussing on Fire the Surveyor will concentrate on the key causes of fire and how this is managed by the business or property owner. This is primarily against financial loss rather than personal injury depending on the requirements for survey Key risk features (which should be included in Fire Risk Assessments…)  Arson Control  Condition of electrical and heating supplies  Waste and congestion  Kitchen fire risk (specifically for hotels and restaurants)  Construction of premises and fire spread potential Then consider management and if improvements are required such as:  Security  Housekeeping  Fire detection  Fire protection including potentially sprinklers and fire suppression Insurers do have the opportunity to require improvement which can invalidate insurance or change their T&C’s if not completed Survey Process 4 |

If, for whatever reason, a premises becomes unoccupied i.e. through tenants administration or end of lease, insurance cover for the building is still required Unoccupied buildings are usually unattractive to insurers, but there is an obligation to support existing customers. New customers proposals for vacant premises are difficult to insure Insurance impact on unoccupancy:  Terms and conditions will change  Restricted cover  Increased premium  Requirements to protect the building is common: ­Services isolated ­Cleared of combustible waste ­Weekly recorded inspections ­Increased physical security, alarm protection or 24 hour security ­Resurveys by the insurer  An vacant property protection industry has grown on the back of insurer demands Unoccupied Premises 5 |

Certainly insurers can manage these buildings in different ways and some flexibility will be called for depending on the building value and how frequently they wish to re-survey Following any single claim to the building, the insurer will decide if a “post loss” survey should be undertaken. The can be based on claim value but the type of premises and type of loss will be considered In the case of vacant buildings, the insurer will usually be robustly managing the case as the potential for repeated attacks are likely Improvements may be required and the insurer will likely support the customer until their renewal date until there is clear neglect for protecting appropriately. Options then occur:  Continue to insure  Continue to insure subject to further improvement  Depending on condition and plans for the building, the insurer may restrict any cover to just debris removal only  Decline to offer renewal  There is no legal requirement to insure the building  If the building is to be demolished and therefore has “no value” full reinstatement cover may not be required anyway Unoccupied Premises 6 |

Insurers do work hard to protect vacant buildings as it is in their interest to reduce the potential impact of claims/losses Ultimately however as a commercial business, the insurer can “walk away” if the risk profile becomes too high or the customer is not prepared to invest in protecting the property Once an insurer has “declined” insurance, other insurers will be reluctant to insure Thank You Summary 7 | Titre de la présentation I 30 Septembre 2014 MENTION DE CONFIDENTIALITÉ