By Melanie Sutton, Portfolio Manager – Property & Engineering
COPE is the method that Lumley Insurance underwriters use to assess ISR risks. It stands for Construction, Occupation, Protection and Exposure – the four key areas that underwriters look at when sizing up your client’s property risks.
Our underwriters will want to know:
1. What are the premises built from? What are the walls, floor and roof constructed of? As a rule of thumb, steel reinforced concrete buildings are underwritten more favourably to combustible timber, the presence of asbestos or EPS panels.
2. What business activities are conducted on site? What are the exposures associated with the occupations? Low-risk occupancies include offices, hospitals, prisons and schools, while warehouses stockpiling rolled paper or flammable goods (e.g. paints) can pose a serious fire risk.
3. What hazards are present and what protective measures have been taken to reduce the risks?
And does the business adequately maintain them? For example, sprinklers can significantly improve fire risks, while a back-to-base alarm can reduce theft exposures.
4. What are the risks associated with insuring this property that could lead to loss? These could include natural perils (e.g. bushfire, flood, cyclones etc.) and man-made perils (e.g. burglary, activities on adjoining properties etc.).
It’s important that your clients understand how an underwriter perceives their property because it enables them to make improvements that will not only increase their insurability but also reduce their risks and premiums. This allows them to invest in the long-term sustainability of their business.
To aid our broker partners and ISR clients, Lumley recently introduced a new Risk Surveying Methodology that includes providing businesses with a free, detailed Risk Survey Report outlining measures they can take immediately and longer term to reduce their risks.
The recommendations might be as simple as putting a process in place to periodically check existing fire-fighting equipment to more significant investments, like installing a sprinkler system. The report also includes the client’s current Risk Rating Score before and after implementing the recommended changes.
View a Sample Risk Improvement Report below.
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