Unoccupied Commercial Property Insurance FAQs
What is a commercial property?
Commercial property typically refers to a building that accommodates usually making a profit. Some examples can include offices, factories, warehouses, chapels, churches, barns and agricultural buildings, schools, universities, surgeries and garages to name a few. A more comprehensive definition can be found here.
Why might I need unoccupied commercial property insurance?
You’re likely to need this cover if you hold a property that is designated for commercial use, and it is going to be unoccupied for more than 30 consecutive days. If part of the building is occupied, for example there are also flats above that will still be lived in, you’re also likely to need an unoccupied policy if the commercial part is going to be unoccupied for more than 30 days.
Why is unoccupied commercial property insurance necessary?
On most insurance policies, it is a requirement that you let them know immediately if it is going to be left unoccupied. Generally, the risk to unoccupied property is higher, especially for fire, theft, malicious damage and escape of water. Your insurer will want to make sure they are covering the risk accordingly.
Generally, the insurance policy you would hold on a commercial occupied or commercial let policy severely restricts cover in the event of unoccupancy, and sometimes won’t even cover it at all. You may not be willing to accept that level of risk.
Do I need to let my insurers know if the property becomes occupied?
Yes – Give them a call about any changes to the occupancy of the property, as it’s usually a condition of the policy you have with them. They will either update your policy to the new use, or suggest moving to an alternative option if that is more cost-effective.
My commercial property might become unoccupied in the future – Should I arrange unoccupied insurance?
It is worth speaking to your current company first and let them know what the plan is, in case they are able to make it work with your current arrangement. If not, they may have other options available to you that can assist.
How can I protect an unoccupied commercial property?
- Arrange regular inspections, generally at least once per week. This is usually a requirement of an unoccupied commercial insurance policy, so make sure it is happening at least as often as the insurer requests
- Make sure that doors and windows are securely locked
- Arrange for any deliveries to be left elsewhere with a nearby business, or taken inside, as well as diverting any mail to another occupied address
- Keep the property and its surroundings in good state of repair
Can I cover for a barn conversion or chapel conversion?
Yes – With the required planning permissions, it is possible to convert a commercial property into residential. Some of the best candidates can be barn conversions, where spacious buildings can be available affordably, or a chapel conversion, where the new property is likely to have as lot of period charm and character. As this involves renovations and a change of use (from commercial to residential) then it is worthwhile seeking out a specialist company such as GSI Insurance Services (Southern) Ltd.
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