It’s about time to get your vacant property insured…what you need to know
Tick tock, tick tock. Yes, time is money. If you own a commercial property, the time it sits empty costs you money. A building you own may be a vacant property for any number of reasons. Perhaps your tenant suddenly declares bankruptcy.
Maybe an extreme weather situation caused significant damage that requires a complex rebuild by specialty trades. Or perhaps you are renovating to attract a new tenant who wants a high value property rental. Regardless of why your property is vacant, specific coverage is needed when a property is unoccupied for as little as four days.
96 hours empty? You own a vacant property.
At some point, your current commercial property policy may exclude coverage. A vacancy of 4 days – just 96 hours – might be why you now need separate vacant property insurance and special risk management actions.
Managing a vacant building would seem to have fewer hazards to worry about. Fewer people, less traffic, less potential liability situations would seem to make sense…right?
The reality of an unoccupied or vacant property is that there are still day-to-day risks. It costs you money for your property to be unoccupied. And that’s why risk management – including securing vacant property insurance – are so important.
Time-sensitive risks to manage in a vacant property
If your commercial property will be empty, unoccupied and/or otherwise vacant for more than four days, be proactive when it comes to managing risk. Here are a few things that you can do.
Trespassers, arsonists, squatters, thieves and other criminals may be attracted to your vacant property. When there are no people using or tenanting your unoccupied property, your security systems can be your eyes and ears on site.
- Maintain security and surveillance efforts and activities during any vacancy.
- Use an on-site or surveillance security presence.
- Potentially install temporary fencing around your vacant property to minimize trespassing or other criminal activity.
Good security best practices can help to reduce the chance of a claim. Your company could be held liable for criminal activity and / or accidents on your vacant or occupied property.
As well, be wary about small hazards – such as an exposed electrical wire or a slow water leak. These types of small risks are normally detected quickly when a building is occupied. Small risks that are identified quickly are oftentimes also repaired before they worsen and cause loss in a vacant property. During vacancy, it is less likely that a small hazards will be immediately corrected. Because of this, a relatively small hazard that goes undetected could escalate into a much larger problem. One such example of this is mould. Gradually occurring, mould damage can add up to significant long term risks and problems.
Watch out for environmental risks in a vacant property
Do you or your tenants use your property to store chemicals or other pollutants on site? If so these materials must be removed or adequately stored in order to prevent seepage and / or leaks. In the event of an environmental risk event, businesses can be held liable for cleanup, in particularly, in the case of groundwater contamination.
Be aware that underground storage tanks can represent an even bigger threat to both the environment as well as the property owner. You should be aware that cleanup costs for pollution are typically excluded under normal and vacant property insurance policies. This is why a separate site pollution policy may be needed if potential pollutants will remain on site while the property is vacant or unoccupied.
Own a vacant or soon-to-be vacant property? Here are 5 ways to take control.
Most business insurance policies typically exclude coverage for a vacant property that is unoccupied for more than a specifically defined time period. To prevent loss situation while your property is empty, vacant or occupied, you can:
- Advise local police department as well as trusted neighbours of the property vacancy.
- Inform your local fire department of any materials on site that could potentially impede firefighting.
- Inspect the vacant facilities regularly or hire a guard service for daily observation.
- Install temporary fencing and/or lighting.
- Remove unnecessary materials and combustibles from the premises.
If your property is about to become vacant or if you are closing on a purchase of a vacant property, now is the time to speak with an ALIGNED Insurance broker. We can check your current insurance policy terms and conditions and determine whether or not you have the coverage you need for a vacant property. We can help get your business aligned with the best vacant property insurance coverage options.
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