The insurance risks and liabilities associated with owning unoccupied property can be extensive, and to ensure you are adequately protected, it is important to know these risks as well as minimise them. Read more on how to protect your Unoccupied Property below.
What are the Potential Risks?
There are a significant number of risks and concerns associated with owning unoccupied property. As Unoccupied buildings are an obvious target for theft, vandalism and trespassing.
For example, the rising cost of copper has given rise to an increase in the theft of copper pipes from unoccupied buildings.
In addition to any loss or property damage that may occur, keep in mind that the owner of a property can be held liable for criminal activities or accidents that take place on the premises.
Unoccupied properties are also susceptible to damage that may be harder to detect, such as fire, water damage, electrical explosions, wind or hail damage, and mould.
Many of these incidents occur in unoccupied buildings due to small, undetected maintenance issues (where someone in an occupied building would have identified and handled the problem before it caused a more extensive loss).
In certain facilities, there may also be environmental hazards that the owner needs to consider. Facilities that are used to store chemicals or other pollutants should ensure that such materials are removed or securely stored – the owner may be held liable for any hazardous materials that contaminate groundwater or other nearby natural resources.
Also, underground fuel tanks present severe challenges and thus should be frequently and carefully inspected by professionals.
Other Ways to Mitigate Risk
In addition to extending cover, there are some simple steps that owners of unoccupied property can take to limit their risk and liability to protect their property.
Maintain an “occupied” appearance to the property –have post forwarded or picked up regularly, mow the lawn, and install light timers and/or a security system.
Make sure the property is free from significant hazards (broken windows or fences, broken railings or steps, etc.) that could cause injuries to anyone who sets foot on the property – this could include firefighters, police officers, maintenance workers or even trespassers.
Performing regular maintenance on the property can decrease the odds of damage. Make sure the heating system and chimney are cleaned and inspected regularly.
Have the plumbing system adjusted to winter settings to prevent frozen pipes. Carry out periodic inspections of the roof, insulation, loft, basement, gutters, and other areas of the house for any necessary repairs, mould, damage or other problems.
You may also consider installing smoke detectors that are tied to a centrally monitored fire alarm system so the fire service will be notified in case of an alarm. Remove all access material and combustibles from in and around the building.
Insuring Residential Properties
Most insurance companies include a clause that a home or building policy will be void if a home or building is left unoccupied for more than 30 or 60 days (depending on the policy).
This leaves the Landlord or Property Owner financially vulnerable to all the risks previously highlighted. However, many insurance companies do offer unoccupied property insurance (also known as unoccupied building insurance or vacant or empty property cover).
Unoccupied Commercial Building Insurance
Vacant commercial buildings are more difficult to insure because they present more significant risks, including an increased chance of theft, malicious damage and burst pipes.
It is essential to disclose all relevant facts when seeking insurance, including the reason for the property’s vacancy and a schedule of any work to be done on the property.
Because of the increased risks and liability associated with unoccupied property, this type of insurance tends to be costly – ranging from one and a half to five times the cost of a property insurance policy.
It is crucial, though, to look beyond the price and consider the suitability and comprehensiveness of the cover being purchased.