The risks of unattended commercial property over the holidays
Leaving your commercial property unattended during the upcoming summer holidays poses many risks. But these can be managed with some forethought.
The responsibilities are a group effort, though. They’re shared between owners, tenants and their representatives, those parties involved in managing and occupying such a property.
Depending on your building’s type, layout, use, and whether you occupy or lease out the premises, there are issues to consider. These include safety, maintenance and usage compliance. Property owners are responsible for maintaining:
- Common and publicly accessible areas
- Shared services and equipment
- The building’s design and operations, such as ventilation and fire safety systems
- Ensuring tenants, or their contractors, don’t make changes that render the premises non-compliant.
The property owner is liable if tenants fall short of agreements to maintain particular elements of essential services.
The risks of empty workplaces
So when a commercial property is unattended for a prolonged period, the risks remain of public liability involving safety and damage. They could lead to tens of thousands of dollars in damages, penalties from regulatory authorities and liability claims from third parties injured or affected.
Poor security or monitoring of unoccupied buildings could lead to:
- Malicious damage, including vandalism and arson
- Theft of (for example) copper piping and other valuable fixtures
- General deterioration due to water ingress and adverse weather
- Equipment neglect
- Hazardous or toxic substances leaking to contaminate the soil or groundwater
- Trespassers, including squatters or drug users, being injured on the property.
Indirectly, that could mean financial and reputational damage for the property owner and tenant.
Reducing and managing risk
Once the council declares it, urgent assistance goes to those worst affected, insurers mobilise extra staff
A leading insurer says while a business is 10% less likely to claim on insurance during a closure period, the average claim for unoccupied properties is 350% higher than one that’s occupied.
Therefore, always ensure you review your security arrangements before taking a break. Identify and attend to spots where trespassers may gain entry during the closure. Signage like ‘no trespassers’ or ‘CCTV surveillance’ may help thwart temptation. As well, test your security alarms, remove valuables from the premises or store out of sight and check windows and doors are locked shut. Give vegetation a trim and ensure you’re up to date on vermin treatments.
It may also be prudent to carry out these practices:
- Tell your staff, clients and customers when you’ll be closed and what alternative arrangements for pick-ups, deliveries, if any, are available
- Report your upcoming closure to emergency services, particularly fire and police and give them your key person’s contact details
- Check your equipment and plant is maintained according to schedule, then shut it down, covering openings to stop dust, insects and vermin from entering
- Test your fire detectors, sprinkler and fire alarm systems
- Isolate water, gas and electrical supplies where possible
- Check the sewers, gutters and drainage aren’t blocked and make sure fire doors are shut.
We’ll recap five declared catastrophes that happened in the last year or so. They’ve led to a total of $2.28 billion claims against insurers, with just under a quarter unresolved as of the end of October. There were almost 134,000 claims, with the average at $17,000. Most of the claims were related to property losses or damage, with a small proportion for contents, motor vehicles and interruption. Nine in 10 claims were personal; the rest were commercial.
How to safely secure your office over the break
So, once you’ve locked up and left, there’s still more you can do to protect your commercial premises. For example, hiring a professional security service to regularly patrol the premises helps resolve any issues promptly. You can opt for:
- Mobile patrols for scheduled visits
- The security company to hold spare keys to your office to use in an emergency
- Security to go to your site when an alarm is triggered
- CCTV as an extra to deter thieves, but you’ll need to have signage, so people know they’ll be filmed (whether they’re supposed to be on your property or not)
- Motion sensors for security lighting
- Joining a ‘Business Watch’ scheme that might operate in your area, much like Neighbourhood Watch, so you can share information. If not, set up your own local business WhatsApp group.
Perth HillThe insurance you need to have in place
There’s an important difference between premises closed for holidays as opposed to vacant or unoccupied premises. The insurance premium for vacant premises tends to be three to four times higher than for tenanted buildings.
We can advise you on managing your commercial property risks. We can customise a policy package to cover your business and property when you’re open or closed for business. Your options include coverage for property, theft and money, public liability, glass as well as machinery. We can help clarify excess amount, sub-limits, inclusions and exclusions. That way, you’ll really be able to enjoy your extended Christmas-New Year holidays, knowing your risks will be covered on several fronts.