When a property becomes unoccupied for an extended period of time it can become more susceptible to claims involving theft, structural damage and flooding from a burst pipe.

The Almshouse Association asked experts at Higos Insurance Brokers how members can protect their unoccupied properties.

1. What does Unoccupied Property Insurance Cover?

Unoccupied Property Insurance can cover a variety of different risks including:

  • Fire
  • Flooding
  • Burst Pipes
  • Escape of Oil
  • Vandalism
  • Malicious damage
  • Theft
  • Property liability
  • Legal Expenses

2. How does the Charity ensure an unoccupied property is protected?

It’s important to be aware of any policy endorsements on your insurance policy.

When a property is unoccupied for an extended period of time insurers usually stipulate a variety of endorsements on your Commercial Insurance policy that would need to be adhered to for cover to remain valid.

These could include:

What is an endorsement?
An endorsement is a modification, amendment, or addition to an insurance contract that alters the terms or scope of the standard policy wording. These modifications, often referred to as endorsements, can include additions, deletions, exclusions, or other alterations to coverage.

  • Regular visits to the unoccupied property
    • Inspecting internally and externally typically every 7 days to check on any issues that may have occurred such as unwanted intruders, damages or water leaks.
    • Ensuring any such damage is reported to your insurer or broker at the earliest opportunity and to the police if a crime has taken place.

ACTION:

  • Check your Commercial Insurance policy wording for how often your Unoccupied Property needs to be inspected and keep a record of each visit.
  • Turn off electricity, gas and water supplies at the mains and drain down all water systems (check your policy for endorsements, you may be asked to keep the heating system on, particularly during the winter months to prevent burst pipes). If the water system cannot be drained, ensure the heating is left on at no less than 7Ā°C. (Please check this with the insurer as minimum temperatures to vary). Remove all waste and all accumulated post must be removed on each visit (or the letterbox sealed)
  • Ensure that all protection and security devices are in full working order, activated and maintained and the boundary is secure. This can be done by putting into force a maintenance plan to keep safe any perimeter fences and to keep vegetation tidy. Security lighting could also be used to assist in deterring intruders from accessing the building.

3. What should the Charity look out for when inspecting an Unoccupied Property?

  • Tampering of security measures such as attempts to disable alarm systems or CCTV.
  • Rubbish accumulation or fly-tipping, this can be a potential fire and health hazard.
  • Leaks and weather damage.
  • Property maintenance issues that could worsen and result in loss if not rectified.
  • Anti-social behaviour such as graffiti or vandalism.

ACTION:

  • It may be appropriate to board up any accessible doors and windows or ensure main entry doors are secured by a five-lever mortice deadlock to British Standard 3621 or similar.
  • If there is an alarm in place, this should continue to be operated, maintained and inspected. A temporary alarm system, CCTV or security service could be considered for larger premises.

4. Does the Charity need to tell its insurer if one of its properties is unoccupied?

In the case of almshouse charities, the most likely situation in which a property is vacant is, of course, pending the appointment of a new resident.

If your property becomes unoccupied for an extended period of time, for example for more than 30 consecutive days, be sure to inform your insurer or broker as soon as possible. You may have endorsements on your policy regarding the length of time a property can be unoccupied before exclusions apply and cover is restricted. 

posted July 2024