Dealing with unoccupied properties exposes Insolvency Practitioners and Fixed Charge Receivers to unique risks which are important to be aware of. The properties you are dealing with should be secure and protected, particularly during the winter months as the likelihood of storms, wind, water damage and big freezes increases the risk of damage to the property.
Statistics published by the Ministry of Housing in October 2020 put the number of empty homes in England at 665,600, with 268,400 having been empty for more than 6 months. It is estimated that there are also 172,200 empty commercial properties. 60 fires a day occur in, or beside empty or derelict buildings and metal theft offences often result in significant damage to empty buildings. Despite the stay on evictions for commercial tenants being extended to March 2022, it is anticipated that the number of empty properties will rise as business failures increase.
Insuring unoccupied property
Insuring unoccupied property is a specialism and insurers that do provide cover often place restrictions on the level of cover available with increased excesses, leaving you partly responsible for claims. The issue is aggravated when an insolvency is involved and therefore it is vital that you work with a specialist insurance broker to ensure you have the appropriate cover in place for the unoccupied properties you are dealing with.
In this blog, we outline the risks of unoccupied property, steps you can take to mitigate these risks, security measures to consider and how our dedicated insurance specialists can help to protect your unoccupied properties.
The risks of unoccupied property
All unoccupied properties face similar risks, including:
- Vandalism/malicious damage
- Wear and tear
- Water ingress due to a lack of maintenance and repair
- Burst pipes
Steps you can take to mitigate these risks
There are several steps you can take to mitigate the risk of damage to unoccupied property such as:
- Ensure all unnecessary furniture, company records, paper and abandoned items that are deemed to be waste (including bins and skips) are removed
- Seal all letterboxes
- Ensure all windows and doors are locked and change the locks if necessary
- Isolate all utilities, water, gas and electric (this is particularly important over the winter months)
- Undertake regular internal and external inspections in line with insurers requirements
- Ensure guttering is regularly cleaned and any blockages cleared including plant/weed growth
- Board or replace any broken windows
- Cut back overgrown vegetation close to the property
In addition to damage to the property, there is also a risk of personal injury to lawful and unlawful visitors to the site. To make these risks clear, consider the following warning signage:
- Dangerous Building
- Danger – Fragile Roof
- Keep Out
- Danger Unsafe Structure
Security measures to consider
There are also steps you should take to secure the premises boundary, particularly when dealing with commercial property:
- Maintain/repair perimeter fencing/walls
- Consider mobile alarms/CCTV
- Restrict vehicle access e.g., concrete bollards/blockades to prevent access to car parks
We are here to help
IRS has exclusive insurance capacity with MS Amlin which provides automatic cover for empty properties up to £15 million reinstatement sum insured.
At IRS, we believe that site visits are essential to ensure you fully understand the risks and the appropriate action required to protect the property. We are also happy to liaise with your appointed agents to ensure compliance with the policy requirements.
Being part of Specialist Risk Group allows us to access alternative insurers for niche or complex unoccupied risks, enabling us to provide a unique service to our clients and offer them a range of exclusive benefits.
Speak to our dedicated insurance specialists for more information or to discuss any specific issues you have:
0115 908 4999