As a good lawyer will always tell you, “read the fine print!” – especially if you prefer to look after yourself rather than go through an insurance broker say.

The problem however is that quite often, you probably have to be a lawyer to be able to understand the fine print! There are endless examples but moving your business to another premise provides a good example.

Whilst a policy may cover the ‘temporary’ removal of your property away from your premise there are potentially loads of caveats. For example, are you moving to an uninsured premise or are you moving specific items of property? Let’s use AAMI’s Business Insurance wording as an example.

Within the ‘Fire and Defined Events’ section, clause 8 on page “Section I A: Page 3 of 5” (attached here for your convenience: AAMI Removal) states:

Temporary removal of property:

“We will pay for loss or damage covered by insured events 1 to 9 of or to property while temporarily removed from the premises or while in transit to or from the premises by road, railway, inland waterway or air”.

So the bold sections means that they are words with “special meanings” according to the policy wording. In which these are basically defined as:

Loss or damage covered by an insured event:

• Fire
• Lightning or thunderbolt
• Explosion
• Earthquake
• Impact
• Riot, civil commotion and labour disturbances
• Wind and/or water (including snow, sleet and hail)
• Sprinkler leakage
• Vandalism

With loss, damage and property further defined thus:

Damage:  sudden or unforeseen physical damage or destruction

Loss:  sudden or unforeseen physical loss

Property:  buildings, contents, stock, capital additions and other items specified in the schedule..

With each part of property such as buildings, contents or stock further defined! In any case, lets just move on…

So, in this instance it would appear that if you are moving premises, your property will be protected under the part which states: “…while in transit to or from the premises by road, railway…”

But, as with any ‘fine print’ what’s the catch? Firstly, there’s a possibility that specific types of property are excluded..for example, money, trailers, watercraft and so on – you would probably need to go through the wording or seek professional assistance.

Secondly, what does temporary mean? It’s not in bold type so it doesn’t have a ‘special meaning’. We know that governments are planning to bury carbon emissions underground – would that be temporary given that the technology appears to be unproven? Ok, extreme example, but you get the point.

Thirdly, what are the limitations – for example, the AAMI policy goes on:

“We will not pay more than 10% of the stock and contents insured amount for stock and contents temporarily removed…” (again more bold type!)

And does this mean that this limitation does not apply to property “…while in transit to or from the premises by road, railway…” given that this section does not specify that the removal needs to be temporary?

Of course, we’re just spectators – given how complex existing business insurance products can be it would seem that you have no choice but to seek adequate advice!

We would love to hear your experiences or if you have any questions!