One of the problems with the insurance of vacant commercial properties relates to claims for “Water Perils” Unattended commercial buildings, without heating are more susceptible to claims from burst pipes. If the property is not checked on a regular basis then damage caused by burst pipes can be substantial before the landlord realises it has occurred.
Because of this, many insurance companies refuse to give water peril cover in respect of vacant property and if cover is provided, then the policy will contain extra terms and conditions. These terms and conditions are designed to help prevent loss, by carrying out the terms and conditions of the policy, the landlord is ensuring that if a loss does occur. They will have helped minimised the cost of the damage and also ensuring that any claim is valid under the policy. Its not just enough for the landlord to say he is carrying out inspections and that the water has been switched off, the insurers will expect some kind log to have been kept and in the event of a claim, a loss adjuster will be sent to investigate the incident . Failure to comply with the terms and conditions could result in a claim being refused and many burst pipe claims now easily run in to five figure amounts.
Insurance warranties for empty commercial buildings
A warranty is usually placed on the policy giving instructions as to what the insurer wants the policyholder to do to help provide a loss. Some modern polices will now modify their wordings if the building is only partially unoccupied, as this is seen as a fairer way of doing things. A typical; unoccupied commercial building warranty would be as follows.
- all gas. water and electricity mains supplies, will be kept disconnected( except those required to maintain automatic sprinkler leakage systems, lighting or alarm systems) which are to remain in operation for fire protection or security services)
- all water tanks & apparatus and pipes must be drained down (other than those connected to sprinkler leakage systems)
- all reasonable steps must be taken to make sure that the building is secure against entry from intruders, this includes securely locking and fastening all doors and windows, sealing all letter boxes, setting all alarms in full operation (if fitted and required)
- all waste refuse and other disused combustible materials to be cleared from the building and removed away from the premises.
- tanks containing fuel or other flammable liquids must be drained within a specified time.
- the building must be inspected at least once every 7 days ( both internally & externally) and a record kept of each visit
The above is just a general list and terms and conditions may vary. What is most important is to study the warranties very carefully. If you are unable to comply with any of the terms and conditions, speak to the insurance company and tell them why, they may just be possible to assist.
Traditionally, unoccupied buildings were offered a very restricted form of cover called FLEA (Fire Lightning Explosion & Aircraft). However, now subject to underwriters agreements, it is often possible to obtain a wider form of cover with many of the standard set of perils included.
At Assetsure, we are able to offer insurance quotes for commercial buildings situated in the UK. We can provide cover for a wide range of trades, including:-