If you have ever had to get a stand-alone unoccupied building insurance quote, you will have been struck by two things. Firstly, you need to go a business insurance company to get a quote and the prices are not cheap. Secondly, when you get the quote confirmed, you will find that the cover you get is very restricted.
If you spoke to a broker and asked for a quote on, say, an occupied office block. You will get cover for a range of “perils”. These are the events, which if they happened, you are looking to buy cover for. No insurance policy covers you for every single type of event. Some things are not insurable, such as losses due to poor maintenance of a property.
The normal range of perils are fire, lightning, storm, flood, burst pipes, theft, malicious damage, riot, impact (by vehicles or animals), explosion, earthquake and aircraft. In addition to this you can pay extra for accidental damage and subsidence, heave and landslip.
As well as these covers you can get glass, sanitary ware (toilets, sinks and baths), loss of rent and property owners liability. If you have a commercial property and it is empty, then most insurers will only provide what is termed flea cover. This stands for Fire, Lightning, Explosion and Aircraft. Effectively, you are only getting cover for fire. Yes, your building could be struck by lightning or hit by an aircraft or suffer a very rare Uk earthquake, but the main cover is fire.
So, if someone break in an steals all the lead or copper pipes and the boiler, you are not covered. For the pleasure of providing this restricted cover, you will be charged a rate of approximately 0.30% on the total building sum insured, plus 6% insurance premium tax. Therefore on a £100,000 building, you will be looking at an annual premium of £318.00 per annum. This may not seem a huge amount, but when you look at how little cover you are getting you may want to look around for an alternative.
So, you may ask yourself, what other covers can I get? This depends on the insurers. None of them will provide you with glass cover, unless there is a substantial (£1,000 plus) excess. The reason being that an empty building seems to be a magnet for people to throw stones or just generally smash the windows. You can get malicious damage cover to the buildings, some flood cover and limited storm cover. You do not tend to get burst pipes cover, unless you have drained down the whole system (ie there is not water in the building to cause damage). If you do have a policy or are looking for a quote, then you really should consider the “wider” cover. You will only tend to pay an additional 10-25% of the premium which, when you look at the damage caused during the winters of the past two years, is well worth paying.
Speak to a business insurance broker, they are independent and can search the market for you. Do not go to a single insurance company as they will only offer you one quote, which will usually be way above what the market rate actually is.