Government restrictions during lockdown increased the number of unoccupied commercial properties in the UK, with several companies opting to shut offices altogether and move to a fully remote workforce.
Even when we are not experiencing these unprecedented times, ensuring that your unoccupied property is insured is vital. Often business owners are operating under the false impression that their standard commercial property insurance remains active when a building is not in use.
Usually, this is not the case unless your policy as a specific additional clause.
Unoccupied property insurance during Covid-19
If you have concerns about the cover on your unoccupied commercial property, it is worth checking what your insurer's approach to the situation is. Given the exceptional circumstances, many insurers are reviewing their position and, in some cases, relaxing their policy requirements.
You should contact your insurer, or another reputable broker if:
- You cannot, for any reason, comply with the terms of the policy. Any change to the policy arrangement needs to be agreed in writing.
- If your policy has multiple underwriters, that may have different unoccupancy conditions.
- Your policy wording contradictions government guidelines.
- There is no amendment of conditions and you are left without cover for your unoccupied property.
If you fail to inform your insurance provider that the property is unoccupied you risk invalidating your existing insurance policy.
What does unoccupied property insurance cover?
Unoccupied building insurance covers you and your business when your commercial property is left empty for longer than your standard policy allows. This period can vary, but a standard timescale is 60 days.
When a property is left unoccupied for a long period the chances of it falling victim to crime such as theft or criminal damage increases. There is also an increased chance of structural damage while no one is present on-site to deal with maintenance issues.
Good unoccupied property insurance should cover:
- Oil or water leaks
- Flood, storm or fire damage
- Theft or attempted break-ins
- Public liability – should any damage or harm be caused by an issue with your property
- Legal costs – if you need to pay any legal fees to deal with issues arising from the property
If you want to protect your business while the property is not in use you need to ensure you find a policy that protects you against all eventualities. Insurance policies differ as to exactly what the coverage is, so research and read policy documents carefully before buying.
What is not covered by unoccupied property insurance?
Again, this varies between providers and policies but in general, these are the aspects not covered by unoccupied property insurance:
- Damage from major works: many insurers will not cover any damage, or other issues, caused during major building or maintenance work outside of the normal scope of property usage.
- Theft or damage caused by unforced entry: leaving your windows or doors unlocked and a criminal getting access. Anything that occurs after this fact will not be covered by a policy.
- Issues caused by contractors: If contractors have been hired to work on the property while it is unoccupied, they are not usually covered by insurance.
How much does unoccupied property insurance cost?
There is no standardised cost for insuring a commercial property, and each provider will charge depending on the property value, its location, how well maintained it is and the security features it has. The overall cost will also depend on the level of cover you require for your property.
It is worth researching to compare costs across the market or to speak to an expert insurance broker so they can guide you to the best deals to meet your needs.
Whatever the situation is for your business you should check the existing cover you have and, if you are not covered, put unoccupied property insurance in place. With the unpredictability of the world at present, covering yourself against costly damage and property issues is the peace of mind needed to keep your business moving forward.