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Business property vacant – but you haven’t alerted your insurers?

Manchester-based professional loss assessors Cherry and Griffithsare urging owners of empty commercial premises to ensure they are still covered by their insurers in the event of a catastrophe.

Most insurers will impose additional conditions on an insurance policy if the property insured becomes vacant and it is the responsibility of the businessto notify the insurers of any changes regarding occupancy. Any business which fails to do this will invalidate a property insurance claim and will be forced to foot the repair bill themselves, which could lead to bankruptcy depending on the scale of the incident.

There are fewer options available for businesses seeking cover for unoccupied premisesand for those insurers which do offer cover, this is likely to be limited. Insurers regard empty commercial properties as higher risk than occupied buildings and may not provide any protection against vandalism or criminal damage. The policy will often restrict cover to the basic perils of fire, lightning, earthquake and explosion and impose conditions such as turning off the water supply in the winter to avoid burst pipes and draining the heating system.

Avoid an invalid claim for water or fire damage, warn loss assessors

Just like any insurance policy, it’s important business owners disclose all relevant information required by the insurer including any refurbishment or building work planned while the building is empty so they can assess all the risks posed. Any fact which may affect an insurer’s view of a risk which is not disclosed to them may invalidate the policy.

Insurance for unoccupied commercial premises is a specialist product and businesses may need to switch insurers to find a company which provides the type of cover they require.

Geoff Williams, director of Cherry and Griffiths, said: “In the event your commercial premises become empty it is essential you alert your current insurers. This information is a material fact and will almost certainly invalidate any claim for fire or water damage if the worst happens.

“You may need to shop around for a specialised product which takes account of the vacancy situation and follow more stringent conditions to ensure your insurers pay-out in the event of loss.

“If you are a business which has suffered loss as a result of damage covered by your unoccupied business premises policy then it is wise to consult the services of a professional loss assessor to make the claim on your behalf and ensure the pay-out is in line with your entitlement”.

Property Aspects Magazine were helped by Cherry and Griffiths in writing this article.