Unoccupied Premises – What is the issue?
- Vacant premises are often not secured properly and are therefore more susceptible to vandals, thieves, arsonists, squatters, and fly trippers
- According to Home Office estimates, there are 60 fires a day in the UK which occur in unoccupied or derelict properties.
- There are substantial costs relating to vacant property in England and Wales
- £500m per annum in vandalism damage to vacant property
- £770m per annum in metal theft
- 22,000 squatters in England with 100,000 reported incidents
- 1,290 major fly tipping incidents
- 18% reduction in the value of property when adjacent to a vacant property
What is it?
- Unoccupied buildings can suffer many problems.
- Some types of vandals and arsonists, such as children, may just be in it for the thrill, while others may have intentions of harming your business or just simply looking for shelter.
- Organised thieves will strip a building of materials like copper wire or pipes which can then be sold as scrap. The costs following theft of such materials may also be higher than their actual value due to the potential for significant damage to the structure as a result of the thieves’ activities.
- Squatters, the homeless or travellers looking for somewhere to live may not leave your site in the state in which they found them, leading to expensive clean-up costs, and additionally may put your premises at risk by starting fires to keep warm.
What is the relevance to my insurance?
- You must make your insurer aware if one of your buildings, or part of one is unoccupied.
- Not doing so will invalidate your insurance in the event of a claim.
What are the regulations?
- In UK law you are liable as the property owner if someone is harmed due to hazards on your premises
- Occupiers’ Liability Act 1984 – allows an injured trespasser to sue for personal injury or death although not for damage to personal property
- Defective Premises Act 1972 – landlords are liable for injury or damage caused through defects in the state of the premises
- Legal aid, Sentencing and Punishment of Offenders Act 2012 – squatting in a residential property became a criminal offence in 2012, however this legislation does not cover commercial or industrial property, which lead to an increase in squatting in these property types.
- Criminal law Act 1977 – it is an offence to force entry to a building which is occupied, including squats – squatters cannot simply be removed and the landlord has to instigate criminal proceedings to have them evicted which takes significant time and expense. Evicted squatters are also unlikely to leave the property quietly or in good condition.
What is the Small Print?
- Insurers reduce cover to Fire, Aircraft, Lightning and Explosion after 30 days of unoccupancy
- This applies to partial areas of the building
- They often will limit the time on risk to a maximum of 1 year
- They require weekly inspections
- Sealed up letterboxes
- Electrics switched off
- Water switched off and drained down
- This can be difficult for houses for example
What do I need to do?
- Some of the things, though not limited to:
- Inform your insurance broker as soon as you know that one of your buildings, or even just part of one, is to become vacant or disused.
- Update any risk assessments whenever any circumstances relating to the building change – fire, Health and Safety and environmental Risk Assessments are necessary for vacant buildings.
- Get relevant locks to gates, external doors changed if the premises was recently occupied or newly acquired.
- Remove any combustible items that may provide fuel for a fire, and empty any bins or have skips removed.
- Make sure unauthorised vehicles cannot enter the site
- As much as possible, do not allow anyone to visit vacant premises alone, or consider the risk to ‘lone workers’ as part of your health and safety risk assessments
Speak to Castlemead to understand the conditions and warranties that might be in place on your business insurance.
Founded in 1987, Castlemead Insurance Brokers is an independent commercial insurance broker, specializing in Corporate Insurance, offering a full insurance broking and risk management service to our clients. Offices in the South-West of England, with clients across the UK, including Scotland and Channel Islands. Castlemead are experts in International Insurance Programmes and are partner members of the GBN Insurance network. We also have an EU subsidiary to aid placing insurance policies with modest EU Insurance risk