From damaged equipment and spoiled stock to fire risks and business interruption, hot weather can place significant pressure on premises, machinery and people. Taking sensible precautions now and understanding what information may be required in the event of a claim can help reduce disruption and speed up the claims process.
Equipment breakdown and property damage
Many commercial buildings and workplaces are not designed to cope with sustained high temperatures. Air conditioning systems, refrigeration units, server rooms and electrical equipment can all come under increased strain during a heatwave.
Where equipment is operating continuously, there is a greater risk of overheating, mechanical failure or electrical faults. Buildings can also be affected, particularly where roofing materials, seals and pipework expand or deteriorate in extreme conditions.
Businesses should ensure that critical systems are being monitored and that any maintenance issues are addressed promptly. If damage does occur, photographs, maintenance records and details of any remedial work will be important when presenting a claim.
Refrigeration failures and stock losses
For businesses that rely on refrigeration or temperature-controlled storage, a heatwave can create significant challenges.
Food retailers, restaurants, wholesalers, pharmacies and healthcare providers may all be exposed to losses if refrigeration systems fail or are unable to maintain safe operating temperatures.
In these circumstances, insurers will often require evidence of the loss and its cause. Temperature records, stock inventories, photographs and service histories can all help support a claim and demonstrate the extent of the damage.
One of the simplest and most effective measures businesses can take during periods of extreme heat is to maintain accurate temperature logs for refrigerated areas and storage facilities.
Changes in Temperature are usually excluded on most policies, and require additional Mechanical Breakdown cover for a claim to be successful.
Business interruption following a heat-related incident
The financial impact of a heat-related loss is not always limited to the cost of repairing damaged equipment or replacing stock.
A refrigeration breakdown could force a restaurant to close temporarily. An overheated server room may prevent a business from operating normally. Manufacturing equipment may need to be shut down to prevent further damage.
In situations such as these, loss of income can quickly become more significant than the original damage itself.
Businesses should notify their insurer or broker as soon as possible where an incident has the potential to affect trading. Early engagement often helps ensure that the correct information is gathered from the outset and can avoid unnecessary delays later in the claims process. It is important to note however that if there is no damage to the insured property, most policies will not respond to a claim for Business Interruption.
Employers' Liability and Public Liability considerations
High temperatures can also increase the risk of illness and injury.
Employers have a duty to take reasonable steps to protect the health and safety of their workforce. This may include providing access to drinking water, allowing additional breaks, improving ventilation and reviewing working arrangements for employees who spend long periods outdoors or in particularly hot environments.
Businesses that welcome members of the public onto their premises should also consider whether customers, visitors or contractors could be affected by excessive heat.
While every situation will depend on its individual circumstances, taking sensible preventative measures can help reduce both the risk of injury and the potential for liability claims.
Increased fire risk during hot weather
Periods of hot, dry weather can increase the likelihood of fires, particularly where vegetation has dried out or where machinery and electrical equipment are operating under additional strain.
Even a relatively small fire can result in substantial property damage, interruption to trading and, in some cases, third-party liability issues.
Good housekeeping, routine equipment inspections and appropriate fire prevention measures remain essential during periods of extreme weather.
What to do if a loss occurs
If your business experiences a heat-related incident, there are several steps that should be taken as quickly as possible.
First and foremost, ensure the safety of employees, customers and visitors. Any immediate risks should be addressed and reasonable steps taken to prevent further damage.
Once the situation is under control, gather as much evidence as possible. This may include:
- Photographs and videos of the damage
- Temperature monitoring records
- Maintenance and servicing documentation
- Incident reports
- Stock records
- Invoices for emergency repairs or replacement items
Finally, contact your insurer or insurance broker at the earliest opportunity. Prompt notification allows advice to be provided from the outset and helps ensure that claims are handled as efficiently as possible.
Supporting your business through extreme weather
While heatwaves are still relatively uncommon in the UK, periods of extreme weather are becoming more frequent and businesses should consider how these events could affect their operations.
Reviewing maintenance programmes, monitoring critical equipment, keeping accurate records and understanding how your insurance arrangements may respond can all make a significant difference if a problem arises.
If you would like guidance on your current insurance arrangements or support with a heat-related claim, the team at Clear Insurance Management is here to help.
