COPE – or construction, occupancy, protection, exposure – is essential information for underwriters when assessing property risks.

As Miramar Property Underwriter Chris Jennings explains: "It's a fairly easy acronym to remember and helpful for brokers to disclose (to us) when it comes to new business submissions."

COPE encapsulates the key information a property insurance underwriter needs to know.

We consider the four terms and nuances of each, below.

Unpacking Construction

"Construction relates to the building type, and the more detail we are provided, the better," Chris says.

"To begin with, the age of the building is important because there are many different buildings out there from different eras and the older the building is, the bigger issue it can sometimes pose."

For example, he explains that buildings that pre-date 1980 may contain asbestos.

An underwriter also needs to know whether pre-2000 buildings have been re-wired or checked by an electrician to determine if they have suffered any wear and tear.

Another factor for an underwriter to consider when it comes to older buildings is whether they are heritage-listed and to what extent.

"If heritage-listed, does the listing also extend to internal fixtures and fittings, which could increase rebuild costs in the event of a loss?"

Details of the building materials used in construction are also important, including how much timber was used in the construction of a property, along with the use of composite sandwich panelling or cladding, and the exact dimensions and material types of those components are important.

"Construction materials can impact exposure in property insurance, especially when considered in conjunction with the business activities," Chris says.

Key considerations for Occupancy

With property owner risk, underwriters need as much information as possible on each tenant and what their business activities entail, Chris says.

Submissions, that points to nothing more than a website or provide the bare minimum for business activities and processes make the underwriters’ job difficult."

An example of a tenant with a high-risk factor that is particularly topical is a property owner who leases to an e-bike retailer.

"We need to know whether they are simply selling e-bikes or also offering a repair service due to the increased risk of lithium-ion batteries."

The same issues apply for the business activity(s) with an owner-occupier.

For example, there's a big difference in the risk profile of a business that manufactures a product compared to a wholesaler.

"With manufacturers, we need to know what maintenance programs they have in place, their storage procedures, whether they have key pieces of machinery, and what business continuity plans they have if something happens to key equipment."

Cooking exposures also represent an occupation where the more information a broker can provide, the better, Chris says.

"When we get a submission with a cooking tenancy, we need to know what risk mitigation measures the tenant has in place, such as wet chemical extinguishers," he says, adding that such information can be "a real determining factor in how we treat the risk and whether we can underwrite it or not."

A key consideration for brokers to remember for property insurance, is the old adage that 'a picture can paint a thousand words', Chris says.

"It can be immensely helpful if brokers supply internal photos showing storage and processing areas.”

Protection explained

Protection encompasses the features the property has in place to prevent losses.

While sprinklers or security systems may be obvious fittings to highlight in a submission,
Chris says property insurance underwriters also need to know details, such as testing and the maintenance programs in place for sprinklers or the monitoring of alarms.

"Loss prevention strategies are only effective if they are maintained and tested."

What is Exposure?

Exposure refers to the potential risk that an insurer faces with financial loss or damage and includes the property’s claims history. This includes exposures posed by any neighbouring businesses or specific geographic features.

"One of the most obvious risks are proximity to bushland, the coast, or a river, which could mean a heightened exposure to bushfire, storm damage, or flooding," Chris explains.
He adds that combining a risk address using Google Maps can sometimes help assess exposure, but this isn't always the case.

"We can usually see what neighbouring activities are being undertaken but sometimes you've got nondescript industrial warehouses or Google Maps isn't up to date so it helps if brokers can provide information about neighbouring businesses."

The advantage of details

While property insurance underwriters understand that brokers are time-poor, more information provided upfront can save time down the road.

"If we can get all that COPE information upfront, the broker is more likely to get a quicker response with less back and forth," Chris says. "The standard quote slip, claims history, and COPE information is ideal."

The final word

It's also crucial for brokers to update underwriters about any changes to the COPE during the life of a property insurance policy.

“We need to know if a new tenant moves into premises next door, if a sprinkler system is upgraded, or if new features are added to the construction of a property, he adds.

More specialised than a general insurer, Miramar offers to arrange a broad range of cover complimented by personal service.

Miramar Underwriting Agency Pty Ltd (‘Miramar’) acts as agent for the Insurer(s) of the products, certain underwriters at Lloyd’s and HDI Global Specialty SE – Australia.