Shopping Complexes and Property Damage & Business Interruption

In August 2004 a major fire in the Mitcham Shopping Centre in Adelaide, South Australia resulted in damage reported to be in the vicinity of $20m.

In the same month fire damaged shops in the Macedon Square Shopping Centre in Templestowe, Victoria.

A fire also occurred in the Torrensville Plaza Shopping Centre in South Australia in September 2004.

Insurance claims involving shopping complexes present many unique issues. Some of these may include: -

Relocation – Many tenants may need to lease alternative temporary premises simultaneously. Vacancies in the neighbouring area are likely to be limited. While some tenants simply miss out those fortunate enough to secure space may be required to pay exorbitant rent.

Multiple Interests - A large number of parties become involved in the claim process including different insurers, loss adjusters and fire reinstatement contractors representing the landlord and the tenant. An organised approach to the claim process is required.

Reinstatement – The landlord may take the opportunity of improving the layout of the complex extending the period of interruption for retailers.

Advertising – A comprehensive advertising campaign co-ordinated by Centre Management is often required to encourage customer traffic to return to pre-fire levels.

Insurance policies for shopping complexes need to be drafted to recognise issues such as these and satisfy both the landlords’ and tenants’ requirements.

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Author

Published with permission of Claim Solutions Pty Ltd.

Insurance Policy

Country: - Australia

Policy Description: - Mark IV Industrial Special Risks (ISR) and many Fire policies

Insurer: - Various

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