Why it’s time to move beyond automatic renewal for your holiday park

The caravan and holiday park sector is navigating a rapidly shifting risk landscape. The transition from post-pandemic recovery to long-term operational resilience has brought fresh challenges in claims handling, asset valuation, and guest expectations. For park owners, renewing insurance on the same basis as previous years is no longer a viable strategy; in the current climate, it is a recipe for significant financial shortfall.

The claims landscape: what’s working and what isn’t

Over recent years, the success of an insurance claim has become increasingly dependent on meticulous documentation and proactive risk management, rather than simply the occurrence of an insured event.

Successful claims

The claims settled most efficiently in today’s market are those backed by a clear digital paper trail. In our experience, having up-to-date maintenance logs for drainage systems and site-wide tree management records can both speed up a claim and help us defend a public liability case on your behalf.

When a falling branch damages a unit, insurers now look for evidence of professional arboricultural surveys. Parks that can demonstrate they followed a scheduled professional maintenance programme tend to experience better claims outcomes, while those relying on informal visual checks may face difficult liability disputes.

Reduced or unsuccessful claims

One of the most common reasons for a reduced or unsuccessful claim is underinsurance triggering the average clause. If you are found to be underinsured, your claims payment may be reduced, leaving you to cover the shortfall from your own pocket. In the most severe cases, where the degree of underinsurance is deemed deliberate or reckless, a claim may not be paid at all.

Asbestos is a good example of where this can catch park owners out. If asbestos is present on site, a qualified surveyor must carry out a formal risk assessment to determine whether the material should be managed in place or removed. If retained, that decision and the supporting assessment must be officially recorded, and relevant authorities notified. If removal is required, the anticipated costs, including both disposal and site rebuilding, must be included in your sum insured for any future claim to be valid.

Emerging assets and risks: avoiding the underinsurance trap

The definition of what constitutes “the park” has expanded significantly in recent years. If you are renewing on figures that are a few years old, you are almost certainly underinsured. It is also vital to distinguish between the market value of a structure and the actual cost to replace or rebuild it, including all materials and labour.

New assets to declare and value:

EV charging infrastructure. These installations are expensive to put in and carry unique fire and electrical risks. They must be explicitly declared and accurately valued in your policy.

Outdoor experience zones. Fire pits, BBQ pods, and outdoor pizza ovens have surged in popularity. These are not simply furniture; they are fixed assets that alter your fire risk profile and require specific public liability consideration.

Underground services. Modern claims frequently expose gaps in cover for the pipes, cables, and fibre-optic Wi-Fi infrastructure that keep a site running. These are easily forgotten in rebuild valuations, but costly to overlook.

Emerging risks to address:

Climate volatility. Coastal erosion and flash flooding in areas historically considered low-risk are now primary concerns. Insurers have tightened terms on non-standard locations, making it essential to disclose any site improvements such as new sea walls, drainage upgrades, flood technology, or upgraded culverts.

Cyber and digital reliance. As parks move to digital bookings and automated gate access, a server failure or ransomware attack is now a business interruption event. If your cover only triggers on physical damage, a cyberattack could leave you uncompensated.

Inflationary pressure. The Royal Institution of Chartered Surveyors (RICS) estimates that rebuild costs increase by 3%–7% each year, with further potential impact from geopolitical instability. Reviewing your sums insured at every renewal is essential, not optional.

Seasonal stock. Stock levels fluctuate, particularly during peak months. Base your stock sum insured on your highest levels, not your lowest.

Matching cover to modern behaviours and expectations

Guest expectations have shifted significantly. Your insurance must reflect the business you actually run today, not the one you started a decade ago.

The dog-friendly revolution

With more guests bringing pets on holiday, animal incidents have become a top-tier liability risk. Having a dog-friendly policy is no longer enough on its own; you need clear rules on leads, designated exercise areas, and documented records of any incidents. If a guest’s dog bites another visitor, you may be held liable if your signage was inadequate or if you failed to act on previous complaints about that animal.

Private vs. park-owned units

There is often confusion about where a park’s liability ends and a private owner’s begins.

Your liability typically covers the pitch, the base, the utility connections, and common areas. The unit owner’s liability typically covers the unit itself and its contents. However, many parks are finding themselves in legal grey areas when a fire spreads from a poorly maintained private unit to a park-owned facility. We recommend requiring private owners to provide proof of insurance annually, and ensuring your own policy includes liability to and from sub-licensees.

The dangers of renewal inertia

Renewing year after year without a thorough review of your policy wording means you are likely carrying unseen gaps in cover. A recent report by the Association of British Insurers (ABI)  found that almost half of SME decision-makers had not reviewed their types of insurance or levels of cover in the previous 12 months, with 10% stating they had not reviewed since first taking out their policy.

Indemnity periods

A 12-month business interruption indemnity period is the standard industry default, but for holiday parks, it is rarely sufficient. A loss just before the start of peak season could wipe out a full year’s income, and if recovery takes longer than eight months, the following season is also at risk. Delays from planning permission, site contamination, or material shortages eat into that period quickly. Once the indemnity period is exhausted, the claim stops, even if your business hasn’t recovered. Extending to 24, 36, or even 48 months is worth exploring, and is often more affordable than expected, as insurers frequently reduce the rate for longer periods.

Rebuild vs. market value

Your insurer needs to understand what it would cost to rebuild your park after a loss event, not its current market value. This includes architects’ fees, site clearance, and the cost of meeting modern building and environmental regulations.

Warranties and conditions

If your policy stipulates a specific type of alarm or a five-yearly electrical inspection (EICR), missing it could void your cover entirely. Treat these requirements as a mandatory checklist for your site manager, not an optional extra.

Practical steps for park operators

To ensure your business remains properly protected, we recommend the following:

Commission a professional valuation. Do not estimate your rebuild costs. Use a qualified surveyor to provide a reinstatement cost assessment; this is the most reliable protection against the average clause.

Stress-test your business interruption cover. Consider what would happen if your main revenue-generating asset were out of action for an extended period. Your sum insured should be forward-looking and account for projected revenue loss during the actual claim period, including growth and inflation.

Audit your site as a guest would. Walk the site with fresh eyes. Are paths well-lit? Are fire-pit rules clearly displayed? If you are closed for too long following a loss, guests may move to competitors, and regaining footfall after restoration can be harder than the rebuild itself.

Clarify roles and responsibilities. For parks with wardens or site managers, ensure their responsibilities are clearly defined in the policy. Payroll figures should reflect seasonal staffing changes and include all employees.

The insurance market is not punishing holiday parks; it is demanding greater clarity and higher standards of risk management. By moving away from automatic renewal and toward a model of active engagement, where assets are accurately valued and emerging risks are proactively addressed, park owners can secure a genuine safety net for their business.

For more information on holiday park insurance and risk management, contact us or speak to your Compass Regional Account Manager.

Opinions expressed in this article are that of Compass, based on our expert view of the market dynamics, unless specific additional source(s) is/are listed.