Buildings Insurance

Unoccupied buildings insurance comes at a premium

Unoccupied properties face a heightened risk for break-ins, vandalism, squatting and a host of other risks. As a result, insurers generally exclude unoccupied properties from their policies as standard. Ordinary insurance will allow for a building to be temporarily vacant, usually around 30 days, during a changeover of tenants or a minor renovation.

Vacant properties left unoccupied for longer therefore require special insurance to cover those added security and other risks arising from leaving a building unoccupied.

Premiums for unoccupied buildings insurance are costly, at around 0.35% of rebuild value, and are likely to only cover fire, lightning, explosion and aircraft (the so-called “FLEA” perils).

In addition, insurance companies will demand that very specific measures are implemented to qualify for cover. This often includes installing metal screens and alarm response systems or stationing static security guards outside properties.

There is a significant and growing body of evidence from County Court possession orders and other sources that these measures are ineffective against a range of threats and often only serve to advertise to potential vandals, burglars and squatters that the building is an easy target.

The vacant building also remains vulnerable to structural deterioration without continued monitoring of the plumbing, wiring and controlling for mould and pests. The issue of accelerated deterioration due to a building being unoccupied should be discussed with insurers when considering security options.

Live-in guards are a viable way of reducing premiums

Stationing live-in guards in a vacant building qualifies the property for a different insurance policy. Owners can pay a lower insurance rate of around 0.2% of rebuild value for a policy that provides full cover compared to leaving a property vacant and paying 0.35% of rebuild value and only being covered against the FLEA perils. On a rebuild value of £5,000,000 this translates into a £7,500 per annum saving on insurance.

Our SIA qualified guards further meet the condition typically set by insurers that property must be protected by licensed guards.

The property is further protected against the deterioration and resultant loss of value that may occur during vacancy through our reactive maintenance programme. Our guards monitor the property for damage and report any issues for immediate response.

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Insurance is significantly higher for empty properties than properties inhabited by guards