Wondering whether you need unoccupied commercial building insurance?

Sudden events like the sale or acquisition of a property and company liquidation cause us to wonder what protection our corporate property needs — and if it even qualifies.

In this blog, find out whether your commercial property is a candidate for unoccupied building insurance or whether it’s just vacant. Insurance or no insurance, you’ll still likely need to put some security measures in place to reduce the risk of damage.

What Is Unoccupied Building Insurance?

Sometimes known as unoccupied commercial property insurance, this insurance type covers an unused corporate property that will remain in this state long-term.

The difference between unoccupied and vacant is simple.

Vacant properties are:

  • Without individuals
  • With possessions such as furniture, fixtures and other material items

Unoccupied properties are:

  • Without individuals
  • Without possessions such as furniture, fixtures and other material items

With this in mind, a corporate property that’s vacant due to temporary leave for a holiday or any other reason is rarely classed as unoccupied. While individuals may be absent from the property, other permanent fixtures remain. On the other hand, a corporate property that’s vacant due to a liquidated business, long-term renovation or is awaiting sale, often qualifies as unoccupied. These properties are more than often left unfurnished with little traffic.

The key difference here is the duration and nature of the vacancy.

Unoccupied commercial insurance is notoriously difficult to arrange compared to domestic insurance that covers an individual’s home or even standard commercial property insurance. It’s strongly advised you speak to a professional about your insurance policy to make sure you’re fully covered, as well as a surveyor to get up-to-date documents about your building’s condition and value.

Not looking for corporate insurance? To find out whether you need unoccupied home insurance, read A Guide To Unoccupied Property Home Insurance by Money Supermarket.

What Does Unoccupied Building Insurance Cover?

As with any insurance type, if you’re thinking of taking out unoccupied building insurance, you’ll need to read the fine print of your potential provider to check which circumstances they cover and to what extent. While there is no maximum period that a property can remain unoccupied for, you’ll need to verify that long-term vacancy doesn’t equal insurance restrictions.

Some providers are more generous than others or will only cover scenarios to a fixed amount. Your cover is determined by the policies of your insurance provider and the condition of your building such as its age, location and any previous claims made.

You’ll want to pay particular attention to any clause that makes your coverage void or involves an initial payout for you to receive compensation.

In other words, exercise the same precautions as you would with any other legally binding contract.

As a general rule of thumb, unoccupied building insurance covers the following:

  • Natural disasters — earthquake, flood etc
  • Fire
  • Theft, vandalism and trespassing
  • Squatters (as per UK squatting laws)
  • Property owner liability
  • Breach of a property contract

Why Might Somebody Get Unoccupied Building Insurance?

By now, it should seem relatively simple why someone would take out unoccupied building insurance. If a fire destroys your corporate asset or a storm incurs major costs in damage repair, unoccupied building insurance is likely to be the thing that aids financial recovery. In most cases, it will also cover a breach of a sale contract and legal fees.

With this said, there are some clear signs that you should take out unoccupied building insurance.

You’re a candidate for this insurance type if:

  • Your corporate property is undergoing long-term renovation (for 30 days or more)
  • You have an unoccupied property overseas you can’t visit in person
  • You own a property that is home to a liquidated business where fixtures and fittings have been removed
  • Your corporate property is awaiting sale and is likely to be on the market for a substantial period
  • You own a property in a vulnerable area where squatting or extreme weather is a common problem

Should I Invest in Security Services or Insurance?

Unoccupied building insurance only covers buildings that fall under the unoccupied bracket — not if they’re just vacant. That said, you’re a clear candidate for vacant property services in the form of security precautions like CCTV and security guarding if this insurance type won’t cover you.

You’ll want to consider these services for your vacant property if:

  • Your corporate property is undergoing a short-term renovation (for a period of fewer than 30 days)
  • You’re taking temporary leave where no individual will be manning the property
  • You have ceased trading yet your property is still fully furnished

Even if your property is a match for unoccupied building insurance, it’s a good idea to invest in both coverage and security measures.

Although this might feel like you’re doubling up on fees, having security, as well as insurance, will help to eliminate the risk of vandalism, squatting and fire hazards to prevent claims before they happen.

Your insurance policy will act as a safety net in case the worst possible scenario ensues. Security measures will greatly reduce that risk and save you time, confusion and money.

Whether you have a vacant or unoccupied property, security services will help you to prevent vandalism, squatting and other costly claims. Call us now on 345 88 88 333 to discuss your options.