Most landlords have experienced a vacant commercial property at one point or another. If a sale is pending, or a tenant moves out of the property, or renovations are underway. Did you know that during this vacant period, your insurance policy does not continue as normal? 

At Morgan Insurance, we’re committed to a transparent partnership as your trusted broker, so we know it’s important to ensure you understand your policy. A vacant property can pose significant risks to a landlord as it becomes unprotected during this time. It’s easy to assume that everything will resume as normal when your property is in between stages, but the truth is, it could leave you vulnerable and liable for situations that are out of your control. So, what are some of the risks of a vacant commercial property when it comes to insurance? 

Let’s break it down.

The 5 Major Risks:

Despite your property being vacant, other risks may leave you liable as the property owner. Most of the time, these risks are unexpected, so it is important that the terms of your commercial property insurance are clear and understood. The 5 big risks you may face include: 

1. Vandalism

An empty property is at high risk for graffiti, public vandalism and destruction (i.e. broken windows and damaged structure). As there are no inhabitants, there will most likely be nobody present to report or prevent these events from occurring. It could be a while before you detect that vandalism has occurred, by which point, you could be liable for further damage that has been caused. 

1. Theft

A form of theft, known as stripping, is a high risk for your property while it’s vacant. Thieves identify these properties as lower-risk, often ‘stripping’ them of air conditioning units, metals, fixtures and electrical wiring. This can result in damage that is higher in value than what’s been stolen, as it damages the structure and function of your property. 

1. Fire

Whether there is an accidental fire or by means of arson, a fire is a huge risk to your property. There is nobody present to detect smoke and prevent the spread of the fire. It is also easy for electrical faults or issues to go unnoticed, which increases the damage that the fire can do to your property. 

1. Water Damage

Water damage, either from a leak, a burst pipe, or stormwater damage, can go unnoticed and untreated for weeks or months. This is where major damage occurs to your property as it can create mould growth, collapsed ceilings and structural damage.

1. Public Liability/ Trespassing

A vacant property is at high risk of trespassing (squatters, homeless individuals, etc). If a trespasser is injured on the property, as the property owner, you will be liable.

Why Your Standard Policy Isn’t Enough

Most commercial property insurance policies have a ‘vacancy clause’, which means that after a period of vacancy (usually 30 or 60 days, although it is best to refer to your policy for clarity), your coverage will automatically be excluded or reduced due to the risks above. So, you’ll be paying for an insurance policy that won’t protect you or your property during this time. 

How Can Morgan Insurance Help You?

If your property is due to be vacant for a period of time, it is best to be prepared for the worst-case scenario by obtaining vacant property insurance (or unoccupied property insurance). This policy is designed to protect you from unexpected risks during the vacancy period and provides coverage for: 

• Fire
• Public Liability
• (Optional add-ons) Vandalism and Water Damage.

At Morgan Insurance, we want to ensure that you’re protected from all angles. So, aside from your additional insurance policy, we recommend that you take actions that ensure your property is more secure. For example: 

• Board up windows, add security fencing and high-quality locks and bolts if necessary.
• Install monitored alarm systems and ‘no trespassing’ signs. 
• Ensure that the property is regularly inspected so you can be updated with signs of forced entry, damage and infestations.
• Maintain the exterior of the property so it doesn’t look uninhabited.
• Maintain your utilities (i.e. shut off your water to prevent leaks).

Minimise Your Risks With Morgan Insurance

We understand the ins and outs of insurance policies, so we can help you navigate the best terms to ensure your property is protected, even when it’s vacant. When your property is vacant, it’s hard to stay updated on what happens inside, and you don’t want to be left liable for extreme damages or legal action. As your broker, Morgan Insurance will be with you every step of the process, from when we find you an insurance policy that works, right up to if you need to make a claim. 

Don’t wait until tomorrow, protect your property today. Contact our experts today to ensure you’re prepared for your vacancy period.