There’s something unsettling about an unoccupied commercial property. Maybe because it highlights redundancies, struggling businesses or market uncertainty. But owning an unoccupied property is even more unsettling, because suddenly, your property becomes a potential target for theft, trespassing and vandalism.
And, what’s worse, is that as the owner of an unoccupied property, you can be held liable for criminal activities or accidents that take place on the premises. So, here are 3 things you might not know that could help you protect your unoccupied property.
#1 The 30-day void
Most insurance policies include a clause that your commercial property insurance policy will be void or automatically subject to additional terms and conditions if the building is left unoccupied for more than 30 days. Of course, it depends on the policy, but this clause means that even a short rental gap could leave you exposed.
As well as theft, trespassing and vandalism, unoccupied properties are particularly at risk of water damage, fire and electrical explosions. These incidents are more common or more severe in unoccupied buildings, because there’s no one around to notice the early signs of a problem.
Top Tip: If a tenant gives notice and you don’t have an immediate replacement, be sure to let your insurer know and ask about additional terms you might need to comply with.
Here are some of the things you may be asked to do to reduce risk to unoccupied premises and maintain your cover:
- Inspect unoccupied buildings every week and log these inspections
- Remove any graffiti and repair damage or defects
- Remove all waste, excess material and combustibles from in and around the building
- Lock and close all external doors and windows
- Seal all letterboxes
- Turn off power, fuel and water at the mains and chain and padlock isolation valves (unless needed for intruder alarms, CCTV, fire detection, sprinkler installation or security patrols)
#2 There’s unoccupied and there’s unoccupied
If you have commercial property that’s temporarily untenanted, your insurer will probably impose some short-term unoccupancy terms and conditions and it’s unlikely you would need a separate unoccupied property insurance policy.
However, if you have an already-empty commercial property that’s likely to be empty for a while, for example a property that’s due to be developed, or a property that’s been boarded up, you’ll need to take out specific unoccupied property insurance.
Top Tip: If a property that’s due to be developed moves into the development phase, you would need to amend your insurance policy from ‘unoccupied property insurance’ to ‘existing structures insurance’.
#3 Unoccupied properties are more difficult and expensive to insure
There’s no getting around it. Unoccupied properties are more difficult to insure because they pose a bigger risk. So, it’s probably no surprise that unoccupied property is more expensive to insure than occupied property. In fact, increased liability and risk can mean that unoccupied properties can cost between 1.5 and 5 times more than standard commercial properties. There may also be more policy conditions and higher excesses.
We prefer to be upfront and honest about these sorts of things, and although insuring unoccupied properties might cost more, the cost correlates to the risk.
The good news is you only need to pay for what you need; you can normally choose between 3, 6, 9 and 12 months of cover. Unoccupied Property Insurance is also a good option if you’re in the process of selling a property or it’s under construction and is uninhabitable.
Don’t let an empty building empty your pockets
A combination of regular inspections, alarm systems and mortise deadlocks can all help to reduce the risk of unoccupied property. But insurance is the only way to make absolutely sure that an empty building won’t empty your pockets.
Need advice about an unoccupied property?
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