MX Commercial Case Study: Overcoming challenging property risks

The Challenge

Our Property team at MX Commercial faced a unique challenge when approached by a supportive broker seeking cover for a property type typically deemed as high risk.

The property in question was a small former mill with associated buildings, totalling a sum insured of approximately £1.5M. The property presented multiple challenges; it was unoccupied, undergoing refurbishments and in a less than optimal condition. The holding insurer had changed its risk appetite, refusing to offer terms for such properties.

The Specialist Solution

Understanding the importance of finding solutions for our broker partners and recognising the merits of the specific case, our team worked diligently to secure insurer’s agreement to offer new business terms.

We proposed to consider the risk on a FLEA (Fire/Lightning/Explosion/Aircraft) basis, introducing terms and restrictions related to the ongoing renovations and the areas of the property in poor repair. The key elements that facilitated insurers' agreement included:

1. Long-term ownership and claim-free history: The property had been owned for over 10 years with a claim-free history, demonstrating stability and responsible ownership.
2. Non-structural renovations: The ongoing refurbishments were limited to non-structural works, minimising potential risks associated with major construction activities.
3. Acceptable construction and usage: The property met the criteria for acceptable construction and the proposed use post-renovation was in line with industry standards. It was not a Listed property, simplifying the underwriting process.
4. Anticipated completion of works: Assurances were provided that the renovation works would be completed within 12 months, reducing the period of heightened risk associated with ongoing construction.
5. Low crime area: The premises were located in a very low crime area, further mitigating potential risks.

The Outcome

Despite the property's challenging nature, our team was able to successfully provide a solution for our broker partner. This not only demonstrated our commitment to supporting brokers in difficult placements but also helped the broker retain an important client for them. By overcoming the hurdles associated with a property typically declined by insurers, we showcased our flexibility and willingness to find tailored solutions for unique challenges. This case highlighted the importance of collaboration and adaptability in the insurance industry, ultimately benefiting our client, the broker and the insured party.

Find out more about our Property Owners cover or contact the MX Commercial team.