The Coronavirus is prompting many businesses to ask their employees to work from home. Or shut temporarily in accordance with Government advice. One impact of these closures and temporary staff relocations is that many, usually busy, buildings are now unoccupied.
It is also likely that buildings have become unoccupied at some speed with the Coronavirus lockdown happening in a relatively quick timeframe. Meaning that advanced planning with regards to unoccupancy has been limited for many businesses.
Therefore, it is important, both from an insurance perspective and from a business resilience perspective that you pay sufficient consideration to protecting unoccupied buildings during this time.
Why do insurers view unoccupied buildings differently?
If you own the building from which you run your business, then it is likely that you will have some form of commercial property building insurance in place.
This type of insurance policy will protect your commercial property against a range of risks such as damage caused by flood, fire or vandalism as just a few examples.
Unoccupied buildings are viewed as more of a risk than occupied buildings by insurers.
Unoccupied buildings can be seen as an easier target by vandals. Flood caused by internal issues such as burst pipes etc can go unnoticed and cause more damage than in an occupied property. And fire risk from arson is higher. Insurers also report an increasing issue of damage caused by unauthorised occupancy of non-residential buildings.
For these reasons, insurers will typically set a maximum number of consecutive days that a property can be left unoccupied for. All policies set different limits, but 30-45 days is typical of many policies. Insurers often define in their policy wording that they will need to be notified if your property will be unoccupied for more than the set amount of days stipulated in your policy.
If a property goes unoccupied for longer than the number of days set in your policy and you have not notified your insurer of this, your insurance may be invalid if you do need to claim.
If you do notify your insurer that your property will be unoccupied for longer than the number of days set out in your policy, they may require you to take out additional insurance or they may impose additional requirements that you must carry out to ensure that you are covered.
How are insurers responding during the Coronavirus?
This is of course an unprecedented time for businesses and insurers alike. Given that the initial lockdown has been in place since the 23rd March, it is likely that some properties will have been unoccupied for 3 weeks now. At the time of writing, no lifting of the lockdown measures has been announced and it is thought more likely that it will continue for many more weeks to come.
It is highly likely therefore that many business properties will be unoccupied for longer than the number of allowable consecutive unoccupied days defined in their insurance policies (typically 30 days).
However, many insurers have said that they will be extending (or being flexible with) their unoccupied thresholds given the current circumstances. All insurers have a different stance on this however and some insurers are also asking that the insured meet additional requirements and take extra steps to protect their properties in this time to ensure ongoing insurance coverage. So, you must check with your insurer (or discuss with your broker) to ensure that your fully understand how your policy will be affected by your property being unoccupied.
Also check your insurers website (or with your broker) for up to date information on whether you need to notify them immediately of the fact that your property is unoccupied.
What steps can help in protecting unoccupied buildings?
You will want to take steps in protecting unoccupied buildings, to minimise the likelihood of common perils such as flood, fire, vandalism, theft etc.
Some areas to consider include:
- Check your property (internally and externally) as often as practically possible. Once a week is being suggested as a good guideline to work to
- Make sure your property is fully secured – doors, windows etc. And that all locks are in good working order
- Ensure that all alarm systems used are activated and in good working order. This should include any CCTV systems
- Do the same for fire related systems – fire alarms, sprinkler systems etc
- Check that all perimeter boundaries (e.g. fences, gates etc) are secured. Also include checks for any perimeter lighting that you have in place. Well-lit areas can help deter criminals
- Secure and seal letterboxes. The same should apply to any other openings. This can help with the risk of arson etc
- Redirect post where possible. This could be to your home address for example.
- Remove any contents of value from the premises before you vacate. Or if this is not possible, ensure that any items of value are locked/secured away and out of sight
- Where not being used to maintain security or other critical systems, consider switching off all non-essential supplies to your building (gas, electricity, water etc)
- Ensure all waste is removed from your building to avoid a build up
- Refer to any risk assessments, business continuity and business resilience plans that you have in place. These can help direct you with regards to the steps you may need to take to protect your business
- For more advice, take a look at this document published by the Fire Protection Association (FPA). It specifically addresses the issue of non-authorised occupation of non-residential buildings (such as squatters and travellers) and provides guidance on minimising this risk
At Anthony Jones, we appreciate that this is an unprecedented situation and that businesses are having to take steps they may not have previously considered in order to comply with the Coronavirus lockdown measures. We are here to help. We are still working (of course in accordance with the government guidelines) and can be reached in the normal way via email or phone. If you have any questions about your business insurance at this time then don’t hesitate to get in touch with us.