The risk of losses from theft, arson and vandalism to empty buildings is increasing. There's also the potential for costs from burst pipes/escape of water claims as the issue often goes unnoticed for longer and an increased risk of third party public liability claims.
Theft and Malicious Damage
The best way to manage such exposures is to put appropriate protection in place. Specialist vacant building protection companies can assess the premises within 24 hours and install temporary intruder alarms almost immediately. Alarms aren't just audible sounders and most are monitored remotely. Additional protection can be added by securing windows with steel screens and adding steel security doors.
Vacant properties can be significantly more hazardous than occupied buildings. Under the Defective premises Act 1972 and Occupiers Act 1984 Property Owners are responsible for the safety of anyone who enters a vacant property. The best way to manage this is to correctly secure a building and ideally the site to prevent access and make it clear that the building is not to be entered.
This is one of the greatest risks to vacant property. Although the law will protect property owners from unlawful occupation of residential buildings, no such law exists in relation to commercial buildings. Evicting squatters from commercial buildings is therefore a matter for the civil courts, becoming a time consuming and expensive task. There could also be costs of malicious damage and fly-tipping that can occur to a building whilst occupied by squatters - especially if it includes hazardous materials such as asbestos.
The insured should notify their insurer as soon as a building becomes vacant to make sure that the cover isn't compromised. They should also:
- Make sure that refuse, waste or combustible materials that may have been left by the tenant are removed from the interior of the building and any yards or outbuildings.
- Make sure that the building is secure with all protective locking devices and alarms activated and the letterbox sealed.
- Isolate the gas and electricity (except that which is required to operate any alarm system)
- Turn off and drain down the water supplies in all empty portions of the building (they should ask their insurer about keeping sprinkler systems activated or also draining them down)
- Inspect the building at least once a week and keep a record of any issues or defects. These should be immediately reported to the insurer.
Need further help?
AXA Insurance has a dedicated Real Estate Team in London along with Commercial Insurance Branches across the UK. If you need any further guidance to correctly manage and protect vacant risks please contact your local AXA Insurance office for further details.