The challenges of negotiating cover for high profile properties

No two properties are ever the same, especially when it comes to unique or heritage listed properties. No two insurance programmes should be the same either. As such, a “one size fits all” approach to property insurance rarely yields the best insurance outcomes or is in the client’s best interest. Bellrock favours a bespoke approach to property placements, with the goal of building an understanding of the property, developing short, medium and long term strategies for renewal and nurturing relationships with the insured and insurance market to provide stability and long term viability to the insurance programme.

Properties which are unique in construction or of historical significance can present a range of challenges when it comes to insurance. Assessing and appropriately covering the inherent hard to place risks associated with such properties requires specialist expertise and a client focused approach based on a thorough understanding of both the insured’s risk exposure and the asset itself. Understanding its features and risk management procedures is necessary to procure appropriate coverage at competitive premiums. The time it takes to investigate these requirements is usually relative to the size and complexity of the property but needs to be thorough and comprehensive to encompass all potential risk exposures prior to engagement with the insurance market to negotiate renewal.

Bellrock has a strong history of arranging insurance for unique and high-profile properties. We recently negotiated terms on a large mixed-use timber pier located in Sydney. This heritage listed wharf was originally constructed in 1915 and was the largest wooden structure in the world at that time. The wharf has had a number of uses over the years, including export of wool, a staging site for troops being deployed to fight in the first and second world wars and as a disembarking point for migrants arriving in Australia. It was slated for demolition before being rescued and redeveloped into a mixed-use development comprising apartments, hotel, retail, commercial space and carpark. This repurposed and redeveloped timber structure presents a number of unique challenges for insurers to consider, despite being well maintained and protected.

In addition to being timber, the location of the property alongside the naval dockyards, sitting above a tidal body of water impacts on the appetite from insurers on this multimillion dollar asset. The multi-purpose occupation tenancy and public foot traffic around the property were also unique factors for underwriters to consider. As such, Bellrock engaged specialist resources such as risk engineers and surveyors, valuers, as well as the building managers, the strata manager and the owners in the provision of detailed information to enable the negotiation and final placement of appropriate insurance cover.

Given the large limit of liability required for this property, significant market support and capacity was required to fully protect the owners. As such, extensive discussions took place with the insurance market. This led to seven major insurers being interested in providing assistance subject to further provision of specific risk information. Bellrock’s preparation prior to renewal and thorough understanding of the property enabled us to negotiate bespoke, fit for purpose cover with all seven insurers to ensure appropriate insurance was placed.

Bellrock negotiates with our insurance partners in an open and transparent way. We have relationships with markets globally which enable us to seek support from both Australian and international markets to complete placements. We work with motivated underwriters who want to provide solutions to clients, and our team provides them with the risk information necessary to provide support to complex placements.

We would always advocate engaging with your broker and the insurance market as early as possible  to ensure the best possible price and coverage outcomes. This is especially important when the asset is complex, high profile or heritage listed. Insurers need time to review, refer, discuss, negotiate and consider submissions on complex property placements, and this process usually takes weeks, not days.

For further information and specialised advice on your property insurance, please contact us via the form below.

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