Cessation of Work Exclusion or Limitation: Many policies have a “cessation of work” exclusion or limitation which will void coverage if work is stopped for a reason other than what is outlined in your policy. Other policies may allow a cessation of work for a certain time period after which, coverage is void or is reduced.
This situation is arguably beyond your control so focus should be on advocacy against temporary suspension of construction activities during this period as a trigger for this exclusion. Either way, however, it is highly recommended that you maintain and protect the project during the period when construction activities are suspended due to Coronavirus. Please speak to us for information on mitigation of risk.
Abandonment: Similar to the cessation of work clause, some policies may contain an abandonment clause. Ensure that the situation related to your project does not constitute abandonment per the terms of the policy.
We anticipate most insurers will not consider the temporary suspension of construction activity due to the Coronavirus as abandonment, however if the change in economic conditions results in the project being cancelled this condition could come into play.
Increased Hazard: The conditions section of the policy may contain an “increased hazard” clause which could void coverage if such increased hazard is not reported to your insurer.
Insurers may consider the suspension of construction activities as a materially increased risk, therefore any foreseen shifts in schedule, scope, occupancy or values should be reported as soon as possible. Please speak to us with any reports.
Herewith some additional guidance from Aviva: