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Unoccupied Commercial Property Insurance: Are You Covered?

Aug 6, 2020

There have been many more unoccupied commercial properties over the last few months as businesses were told to close and people worked from home complying with the Coronavirus lockdown rules.

Unoccupied commercial property insurance during the Coronavirus lockdown

Unoccupied commercial properties are vulnerable to heightened risks in some situations and therefore insurance policies usually put in place certain rules regarding how long properties can be left unoccupied for. We saw easing of these rules during the Coronavirus lockdown by many insurers to reflect the situation and support businesses.

Typically, commercial property insurance policies will stipulate that properties cannot be left unoccupied for more than a defined number of consecutive days (many policies cap this at 30 days). However, during lockdown many insurers looked to extend or be flexible with unoccupied thresholds to account for the situation linked to COVID-19.

But as lockdown rules ease, businesses are allowed to reopen and people are encouraged to go back to work, we are starting to see insurance policies return to pre COVID limits when it comes to unoccupied commercial property insurance.

Commercial property insurance if it is still unoccupied after lockdown

With many businesses reopening from the 1st August after the government allowing employers a greater say in employees returning to the workplace, many of the insurers who added extensions or flexibility to their unoccupied commercial property insurance thresholds are now returning to or have returned to, pre COVID-19 rules.

For this reason, we would advise that if you do still have an unoccupied commercial property (for example, your business may be able to reopen but you have chosen not to yet) to check with your insurer or insurance broker with regards to your insurance coverage when it comes to unoccupied properties.

In the majority of cases, normal terms and conditions of your insurance policy are likely to apply to unoccupied buildings now that lockdown has eased and businesses are able to reopen, and this will include following the risk management guidance of your insurer.

Why does insurance change for unoccupied commercial properties?

There are many risks which unoccupied commercial properties may be vulnerable to including

  • Arson
  • Flooding
  • Vandalism
  • Unauthorised occupancy

When commercial properties are unoccupied, these types of incidence can also go unnoticed for longer providing the opportunity for greater damage to be caused

What to consider when reopening your commercial property

We recently shared a guide put together by Zurich, one of our insurance partners, looking at risk management when it comes to safely reopening commercial buildings.

Covering areas such as:

  • Restoring power and utilities
  • Restarting of machinery
  • Water safety
  • Fire safety

The document provides a comprehensive overview of areas to consider and a checklist to keep in mind when reopening a commercial property which has been unoccupied for a prolonged period

It is also important to ensure that you adhere to all government guidance and rules relating to COVID-19 when it comes to asking employees back into the workplace to ensure safety for all. This will likely mean you need to make changes to your working space and working practices.

For the most up to date information and guidance on creating a COVID-secure workplace visit the gov.uk website.

If you have a commercial property insurance policy arranged through Anthony Jones and have any questions about unoccupied commercial property insurance, then do contact us as soon as possible.

As with all insurance policies it is vital to check your commercial property insurance policy, either yourself, with your insurer or insurance broker to check what cover you do and do not have and how changing circumstance will affect that cover. If you work with Anthony Jones, we can advise you not only on your insurance requirements but also on your risk management strategy. Get in touch with us today.

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