By Emma Hughes, New Business Broker
A stillage condition is simply the height at which goods must be stored off the ground. It is important to know whether or not your policy contains a stillage condition as it usually a condition precedent to liability. When a condition is precedent to liability it means that if you are non-compliant with the policy condition then the insurer can avoid meeting liability for that aspect of the insurances.
The condition is most commonly found when a business stores a large quantity of stock or materials. Most warehousing and retail policies will contain a stillage condition but it is not exclusive to these sectors.
Below is a typical example of a stillage condition wording:
It is a condition precedent to liability under Section A of the Policy that all Stock insured shall be stored on pallets, shelving, racking or similar at least 15 centimetres off the floor.
The height stipulated can vary and is generally influenced by the flood risk in your area, where the goods are being stored e.g. a basement presents a higher risk of flood than first floor, or the value of goods at risk.
If your policy contained the above stillage condition and you were unfortunate enough to suffer from a flood, any stock that was stored below the 15cm would not be indemnified by insurers. This would be the case even when you have insured for the full value of all stock. For some businesses this could represent a huge uninsured loss.
Any conditions of this nature should be highlighted in your policy documents but if it is unclear then please do not hesitate to contact us on 01642 240400.
Erimus Insurance Brokers is a trading name of Teesside Insurance Consultants Ltd. Registered in England No. 2043783.
Authorised and regulated by the Financial Conduct Authority No. 307660.
Directors: P.J. Davison, S.D.E. Hughes, I. Miller ACII, S.S. Pinnell. Non Executive Director: G. Lumby MBE, FCIBS.
Company Secretary: C. L. Nolan.