- Remaining on cover with a HNW provider whilst works are ongoing is very important. Should a client suffer losses such as subsidence during a works project, this could be very difficult to place elsewhere once works have finished.
- Further to this, Hiscox will underwrite the future risk where possible and work with clients to highlight alarm and WLD requirements ahead of the works being undertaken. We do this to ensure a smooth process post-works and that a client can use the opportune moment, whilst works are ongoing, to make improvements to their property that may be required by insurers in the future.
Claims examples where clients were not covered by Hiscox
- A rather unfortunate claim example that I’m aware of it one where the insured suffered a fire loss, c. £600k total damage, and hadn’t advised their insurer of the contract works. They were instead relying on the contractors’ insurance for the works and hadn’t realised the impact of this on their home insurance policy.
- At the point of the loss, the client discovered that the contractors insurance policy did not cover them for underpinning works and the SoF stated that no underpinning works would be carried out by the contractor. Unfortunately in this example, the contractor was carrying out underpinning works and therefore there was no cover for this project.
- Examples like this highlight the importance of remaining in control of your insurance during works. The client was left with £600k of damage and a mortgage to continue paying, on a house with significantly reduced value.
Example 1
- On the final day of cover, a clients representatives received the keys from the contractor.
- The insured had been carrying out a partial refurbishment of the home, including the design an installation of a new platform lift, glazing and landings, and a layout change of the master suite.
- The cost of the project was £1.1m and had been carried out of the last 12 months.
- On opening the door of the property they heard the fire alarm and saw water flowing from the ceiling and that the house was flooded and fire curtains down.
- The property was a substantial 3 storey, £5.2m London townhouse.
- Having called the contractor who returned that day, the contractor drained 100mm of water from swimming pool as according to the Contractor the water level had risen by 40mm due to the leak.
- The cause of the leak was later identified as a fault ‘douche hose’ connected to an upper floor shower which had been installed as part of the works.
- Total cost of the claim was £900k (and would have been more if alternative accommodation was required)
Example 2
- The insured property is a substantial detached dwelling with a £6m rebuild.
- Our client was spending £2m extending the property, increasing garage size, a garden room and an extension of the kitchen. The project had been ongoing for 14 months at the time of the loss.
- In November 2023 a fire occurred in the insured’s plant room. The property was undergoing a process of extension and refurbishment at the time of the fire, which had prior to the fire been due to complete by 15th December 2023. Works had been ongoing on site on the 29th November including in the plant room. The plant room had been by the electrical sub-contractor prior to the fire (who had been working on installation of lighting control modules).
- Around 12.30 a fire was noted by the site manager in the plant room and whilst attempts were made to tackle the blaze using extinguishers it could not be extinguished. The plant room was secured and the fire brigade attended. The blaze was largely contained to the plant room, but fire, heat and smoke damage occurred within the plant room and the adjacent pool room with further smoke damage elsewhere within the property.
- The plant room contained extensive equipment and infrastructure for several systems such as the integral multi-room audio-visual, security, fire, heating, CCTV and general electrical cabling most of which was considered to be beyond restoration due to the impact of fire, heat and/or smoke. This has been the most significant driver of cost.
- The loss occurred shortly before the property was due to be furnished which did limit the loss.
- Total cost of the claim was £375k.