If you own a commercial property that’s currently empty, you might be wondering if you still need to insure it. Maybe you’re between tenants, waiting for renovations to finish, or the building is simply vacant.
The short answer is a definitive yes, and here’s why.
Your standard commercial property insurance will likely become invalid after a building has been unoccupied for just 30 to 60 days. Insurers view empty premises as a higher risk, as they’re more susceptible to vandalism, theft, fire, water damage, and even squatters. That’s why specialist unoccupied commercial property insurance is absolutely essential.
This guide will walk you through the types of coverage you need, what’s included, and the key requirements insurers have when a building is left empty.
What is Unoccupied Property Insurance?
Also known as vacant property insurance, this specialist policy is designed specifically to protect empty commercial buildings. It typically includes:
- Buildings Insurance: This covers the structure itself from common risks like fire, storms, floods, and subsidence.
As vacant buildings are considered higher risk, this type of insurance often comes with specific conditions you’ll need to meet:
- Regular Inspections: You’ll likely be required to inspect the property on a weekly or fortnightly basis.
- Utilities: Insurers often require that utilities like water systems are switched off or drained to prevent damage.
- Enhanced Security: You’ll need to implement extra security measures, such as upgraded locks, shutters, or monitored alarms.
Liability Insurance
Even with no tenants, you are still legally responsible for the property. Property owners’ liability insurance protects you if someone is injured on or near your site – a trespasser, a contractor, or even a passerby could have an accident. Without liability cover, you could face a costly compensation claim, which can be financially devastating.
Extra Protection to Consider
Depending on your situation, you may want to add on some additional coverages:
- Limited Contents Insurance: If there are still fixtures, fittings, or equipment left inside the building, this cover can be a lifesaver.
- Loss of Rent or Business Interruption Cover: This is crucial if insured damage delays a new tenant from moving in, protecting your income stream.
- Legal Expenses Insurance: This can be incredibly helpful for dealing with the legal costs of removing squatters or handling property disputes.
- Terrorism Insurance: This is often excluded from standard policies and needs to be requested specifically.
Key Things to Know About Insuring Vacant Commercial Properties
- Notify your insurer immediately once the building is unoccupied. Your existing policy may no longer be valid.
- Premiums are typically higher for unoccupied properties due to the increased risks.
- Short-term policies are available. Many providers offer flexible 3, 6, or 12-month policies, which are ideal if you’re in between tenants or planning a redevelopment.
Your Questions Answered
- How long can a property be empty before my insurance is affected? Most standard policies limit inoccupancy to 30 to 60 days. After that, you’ll need a specialist policy.
- Is vacant building insurance more expensive? Yes. Empty properties are considered higher risk, so premiums are usually higher.
- What if I don’t tell my insurer the building is empty? Failing to notify them could invalidate your existing cover. If damage occurs, your claim will likely be rejected.
- Do I have to inspect the building regularly? Yes, most insurers require you to conduct inspections to spot issues early and reduce risk.
- Can I get cover while waiting for tenants? Absolutely. This is a common reason for needing this type of insurance, and flexible policies are available to suit your timeline.
Leaving a property unoccupied doesn’t mean leaving your investment unprotected. The right insurance ensures your building is safe from damage, liability claims, and other unforeseen problems.
Cofton Insurance Can Help
Looking for unoccupied commercial property insurance? We can help you find tailored cover that protects your property while keeping costs under control. Contact us today for a free, no-obligation quote and make sure your empty building is fully protected.