When an insurer requests a property survey, it’s often viewed as a formality—a box-ticking exercise before underwriting a policy. However, these surveys serve a much greater purpose, particularly for unique and for historically significant properties like Victorian pubs.
Long-term AHA (Vic) partners, Adroit Insurance & Risk, examine the rationale behind insurance property surveys to help understand why conducting them and then ensuring the completion of the resulting risk recommendations is so important.
Their Purpose
Insurance property surveys are a proactive measure designed to assess the risks associated with a property. For Adroit’s partnered hospitality insurers, the primary goal is to evaluate potential hazards that could lead to claims, such as fire, theft, or structural failure. When Adroit provides a policy submission to an insurer, they will outline standard information about a property that they have obtained when discussing with their prospective client. An insurer survey will then provide a detailed, on-the-ground assessment of the property’s condition, its surroundings, and its usage. These are sometimes required to be conducted before accepting the risk or can be requested before the next renewal.
Given the number of insurance exposures that Victorian pubs can face, the need for such surveys is even more significant. These properties often feature unique designs, older construction materials, and historical significance, which can present both challenges and risks. Insurers aim to identify vulnerabilities, such as outdated electrical wiring, inadequate fire suppression systems, or issues with accessibility and security. By pinpointing these risks, all parties can find themselves in a better position.
As an example, Adroit provided the insurer with what is commonly known as COPE (Construction, Occupancy, Protection & Exposure) information when requesting insurance for a pub located in regional Victoria. Given the location, age and sums insured of the property, the insurer notified the Adroit Risk Adviser that they would be required to have a survey completed before accepting the risk to ensure that they were completely comfortable with the exposures. As the Risk Adviser had met with the prospective client with plenty of lead-in time, this was feasible, and a survey was arranged to be conducted 2 weeks from the date.
Understanding Risk Recommendations
Once a property survey is completed, the insurer typically issues a series of risk recommendations tailored to their specific findings. These recommendations can range from simple fixes, such as improving signage for emergency exits, to more complex undertakings, like upgrading fire alarm systems or replacing older hazardous items.
For Victorian pubs, examples of these recommendations might include:
• Fire Safety Upgrades: Installing modern fire alarms, fire extinguishers, and sprinkler systems to reduce the risk of fire damage.
• Structural Improvements: Addressing concerns like sagging roofs, cracked walls, or inadequate foundations to ensure the building’s integrity.
• Security Enhancements: Adding CCTV cameras, reinforced doors, or alarm systems to deter theft and vandalism.
• Electrical System Overhauls: Replacing outdated wiring to prevent electrical fires and ensure compliance.
• Documentation and Training: Developing emergency plans and training staff in safety protocols to ensure readiness in the face of a crisis (for example, a bushfire).
While these recommendations may seem costly and to be a burden, they provide a roadmap to safeguarding the property and its occupants while minimising potential insurance claims.
The risk adviser from Adroit ensured that they attended the survey to give them the information first-hand and to allow for more in-depth explanations with the client later. Following the survey, the risk adviser explained the concerns that were brought up by the surveyor. After a period of about a week the insurer contacted Adroit’s Risk Adviser providing the all-clear for them to underwrite the risk, but that there were some items they would like addressed as soon as possible and these would be formalised as risk recommendations.
In this example, the insurer put a large focus on clearing some of the ‘clutter’ (which presented itself in the form of pallets in the rear back corner of the property), a thermal scan was required to be conducted as soon as possible to ensure the wiring was safe and any ‘hotspots’ could be identified and fixed, and then that the deep fryer flue be cleaned on a more regular basis.
Benefits of Implementing Risk Recommendations for Victorian Pubs
Adopting the insurer’s risk recommendations offers several benefits for Victorian Pubs, both immediate and long-term:
• Reduced Insurance Premiums: Many insurers offer lower premiums to properties that take proactive steps to reduce risk, rewarding pub owners for their commitment to safety.
• Enhanced Safety: By upgrading safety features, pub owners protect not just their property but also the patrons and staff. This fosters a safer environment and strengthens customer trust.
• Preservation of Heritage: Victorian pubs often have significant cultural and historical value. Addressing structural concerns ensures these buildings remain intact for future generations.
• Increased Property Value: Completing recommended upgrades can enhance the property’s market value, making it a more attractive asset.
• Operational Continuity: Implementing risk management strategies reduces the likelihood of incidents like fires or theft, minimising disruptions and ensuring smoother daily operations.
Adroit was able to work with the client to ensure that these items could be ticked off by the insurer as complete. The evidence of completion was sent by the Risk Adviser to the underwriter, who in turn had it assessed by the surveyor. In this instance, the surveyor was satisfied, and this ultimately resulted in a more insurable risk, the insurer’s best price and most importantly, the likelihood of a claim was reduced.
Conclusion
Insurance property surveys are more than just a procedural requirement; they are a collaborative effort between insurers and property owners to mitigate risks and ensure the long-term viability of the insured property. For Victorian pubs, the benefits of following through on risk recommendations extend beyond compliance, encompassing financial savings, enhanced safety, and the preservation of cultural heritage. By viewing these surveys as opportunities rather than obligations, pub owners can unlock significant value while safeguarding their beloved establishments.
Get in touch with the team:
Please reach out to Daniel Gilbert (Partnership Manager) at danielg@adroit.com.au who will connect you with a local Adroit Adviser to discuss your venue’s insurance needs or risk strategies.
Disclaimer:
Adroit Insurance & Risk Pty Ltd is a Corporate Authorised Representative (CAR No 1309996) of Insurance Advisernet Australia Pty Ltd, AFSL 240549