Reducing the risks on empty buildings

As an owner of a commercial property are you aware that most standard insurance policies will not provide cover for buildings which are left empty or unoccupied for more than thirty days asks commercial property agent Prop-Search.

Whilst positivity has returned to the economy and vacancy rates are now at their lowest for four years, it is still estimated that there are as many as 100,000 commercial properties lying empty across the UK.  And when a commercial property is left unoccupied it becomes exposed to all sorts of potential risks; fire, theft and damage, as well as the increase in liability issues - all important factors which owners should take in to consideration.

Chris Billson, a Director of Prop-Search, says: “As the owner of a property, it is more than often a legal requirement to inform your insurer when that property - as a whole or in part - becomes vacant.  It is important to check the terms of a building insurance policy as soon as the property becomes vacant to make sure the building is adequately covered.  Failure to notify your insurer can either invalidate or reduce the cover on a policy as vacant premises are generally more costly to insure and can require additional cover.”

In association with insurance broker Wentworth Alexander Limited, a special facility has been negotiated with ‘A’ rated insurers to offer preferential premiums and policies to all Prop-Search and Prop-Manage clients.  Prop-Insurance will cater for all commercial property insurance requirements even if a property is unoccupied. Significant premium savings and improved insurance cover could be available.

“Often, a warranty is placed on a policy giving instructions as to what the insurer wants the policyholder to do in the event of a building becoming empty or partially occupied”, adds Alex Mitchell, an Account Executive at Wentworth Alexander Limited.  “This could be to ensure that all gas, water and electricity mains supplies are disconnected - except those required to maintain sprinkler systems, lighting or alarm systems; all water tanks, apparatus and pipes drained down; all reasonable steps taken to make sure that the building is secure - including sealing all letter boxes; and the building is inspected at least once every seven days - both internally and externally- and a record kept of each visit.”

Making a claim can be problematic if policies become void due to non-compliance with any of the insurer’s conditions.  Active management through regular inspections is a good way to identify potential problems before they occur and also help to retain value and avoid buildings falling into disrepair. 

Chris Billson concludes: “Not only is it less expensive to undertake ongoing maintenance than a major upgrade, it can also reduce your liability should someone get hurt on the premises; there have even been cases where intruders have sued property owners because they have injured themselves while trespassing!”

If you would like to discuss your business insurance and / or risk management needs in more detail, please contact your Prop-Search - Tel: 01933 223300 / 01604 492000 or its website: www.prop-search.com