When a claim happens in an empty space, it may not be covered

The last 12 months have seen many businesses and student housing properties unoccupied and remain vacant given the restrictions and lockdown measures due to COVID19.  Many Canadians have assumed that insurance is not required on vacant properties or haven’t reported these vacancies to insurers, unaware that, any claims that may arise while these spaces are sitting empty might not be covered.

After everything we’ve been through, that’s the last thing a struggling business owner or landlord needs. Unoccupied property needs to be managed to prevent or limit issues that can lead to damage and additional cost.

A proactive approach can protect your premises and ensure it remains an asset for future development or sale.

When a property is unoccupied and unvisited, it can suffer damage such as:

• Fire caused by arson or a defective electrical installation
• Water damage due to leaks or burst pipes
• Vandalism including malicious damage and graffiti
• Theft damage to the building when gaining access, theft of building materials and contents
• General deterioration caused by adverse weather, possibly because of lack of maintenance
• Squatters

If you have a vacant property, consider the following proactive measures to help reduce the risk of damages:

Secure Vacant Buildings

When a property appears to be empty, it can look like a soft target for criminals. As a property owner you need to protect your premises from intruders and malicious damage. Consider the following tactics:

• Introduce additional security measures, visual deterrents, and maintain the property on a regular basis.
• Conduct routine inspections (at minimum every 72 hours) and provide alarm protection.
• Hire a management company to oversee your premises if you unable to.
• Manage lawful entry to the premises.
• Review existing safety arrangements for the property and implement any additional controls to ensure the safety of visitors.

Additional Protective Measures

• Talk to your broker and undertake a risk assessment.
• Remove unnecessary items like furniture, packaging, and waste.
• Have all tanks emptied and isolate the water, gas, and electricity supplies.
• Remove any garbage, empty waste bins, and move them away from the building.
• Control who has access in and out of the premises and record visitors.
• Change and maintain security fences and gates.
• Protect windows by boarding up if necessary.
• Prevent access by unauthorized vehicles using padlocked gates, lockable security posts or substantial lengths of concrete.
• If unguarded, check and inspect the property on a regular basis making sure any issues are dealt with and the property is kept secure.

Vacant Property Insurance

Let your insurer or broker know if your property is likely to be vacant for any time that exceeds 30 days.  Your broker will know what kind of policy is required to protect your property properly.

Vacant Property Inspections

It may be a coverage requirement that unoccupied buildings or residences be inspected by you, or your appointed representative, at least every 72 hours. All visits should be formally recorded so that you can prove it if you are asked to later.

This is to ensure that if damage has occurred it can be rectified at the earliest opportunity, preventing any further damage. Water leaks, for example, may start off small but if left undetected can build up and become severe, resulting in everything from mould to rot occurring in the premises. All damage, whether is due to the elements or crime should be reported immediately to your broker or insurer and the police if it is crime related.

Vacancy is a real issue if not managed properly. If you have any questions or would like more information, call your broker so they can help ensure you’re protecting your property even if it’s empty.