If you own or are responsible for insuring a commercial property, then, especially in the current circumstances, you must check that your property has the correct insurance.
With many businesses temporarily closing – leaving them unoccupied for a period of time – the protection offered by a commercial buildings insurance may become severely restricted. In some cases, it may lapse entirely.
This is because, when your property’s unoccupied, statistically it suffers a higher risk of damage from flood, leaks, arson, burglary, vandalism and perhaps squatting. And no one is there to notice if there is a small leak, for example, which, left unrepaired can cause extensive damage, or to act as a deterrent to burglars etc.
This higher risk typically won’t be covered by your commercial property insurance, so the first thing you need to do if your property will be unoccupied is to check what your current policy entails.
Check what your current insurance policy covers
Policy features, benefits, terms and conditions vary depending on your insurer and product type. Check the terms and conditions of your commercial property insurance carefully since many insurers restrict or remove cover altogether once the building has been unoccupied for a given period – a period which varies from one insurer to another, but typically is around 30 consecutive days.
Once you have reviewed the exact provisions of your existing commercial property insurance, you may need to consider unoccupied property insurance to restore the level of protection you require for the building, its contents and your liabilities as the property owner.
It is also important to note that if you have a mortgage on the commercial property, it may be a condition of your mortgage agreement that you have adequate, valid buildings insurance cover at all times. Failure to do could see you in breach of your mortgage contract, which can have serious consequences.
What should you do if your commercial property will be unoccupied?
Firstly, speak to us so we can arrange specialist commercial unoccupied property insurance.
Secondly, ensure you understand what all your obligations are under the terms of your unoccupied property to ensure full cover continues. Generally, you will be obliged to carry out certain activities during the period of unoccupancy. These may vary on a policy by policy basis, but in most cases, you will need to:
- regularly check the building (usually once a week) and maintain a log of these visits;
- ensure that any utilities are turned off (except those needed to power security and fire alarms);
- keep the area and yards around the building free from waste and refuse;
- ensure the building is properly secured, with all alarms turned on and locking devices in place.
Further reading: Commercial property insurance.
Do you have any questions?
Then please contact us – we’d be delighted to help.
