When your property becomes vacant, don’t forget about it if you want to ensure that you receive a claim settlement in the event of a loss. To make you aware of the risks around your property, McClarrons have listed 7 reasons why an insurer may not pay out for your unoccupied property.
Whatever the reason your commercial property is standing empty, the last thing you want is to lose money on it, as well as not receiving any rental income. But this happens frequently to commercial property owners who have not understood their responsibilities when insuring a vacant property.
Having property insurance in place which specifically includes a clause around an unoccupied property is, unfortunately, not usually enough. You also need to give your insurer the confidence that you’re taking as much care in protecting your property physically, as they are willing to do financially.
Keeping your property’s safety and security firmly in sight can be the difference between receiving a full settlement, and nothing at all. Here are 7 common reasons why your insurer might not pay out in the event of a loss:
1. Informing your broker or insurer – The risks associated with occupied and unoccupied properties are wildly different. By not advising your broker or insurer of any important updates, you could be voiding your policy. Many insurers will not insure unoccupied properties.
2. Inspection Logs – Internal and external inspections should be carried out weekly, with a record that should be kept for a minimum of 12 months.
3. Maintenance – If you’ve discovered any damage or defects which have not been repaired, any greater issues which have emerged as a result are unlikely to be covered.
4. Fire Hazards – Loose combustible items, including furniture, pallets, mail, waste, refuse, stock, gas bottles, are all fuel for fire. An insurer could argue that if these had been removed, a fire would either have not caused a lot of damage or even started at all and so will likely invalidate your cover.
5. Security – Any external doors or windows left unlocked are enough to void protection if a break-in occurs.
6. Power Supply – Dust build up is a big cause of fires starting from power sources, while water mains left on could lead to internal flooding which goes unnoticed for days.
7. CCTV and Fire alarms – If there’s not sufficient power to supply preventative systems, they may as well not be there. This also applies to any sprinkler systems installed.
If you’re unsure as to what measures you should have in place for your unoccupied property, or what your insurance policy expects of you, get in touch with the team at McClarrons who will be happy to guide you further and help you to decrease the likelihood of suffering a claim for which you will not be covered.