Article date: 12 August 2008
Malicious damage to vacant properties and underinsurance is costing property owners millions of pounds, says Norwich Union.
Every year over three million properties are vandalised and of these, 25% of this malicious damage occurs in empty properties.*
Norwich Union - part of Aviva, is recommending the use of specialist companies to alleviate the burden of premises that become unoccupied.
Buildings often lie vacant if they are pending demolition and during reconstruction. In addition, development within the UK's major cities means that businesses are moving out of their office blocks and into new bespoke buildings, more suited to their needs - leaving many older properties standing empty.
Tighter lending conditions, increased borrowing costs and subdued business optimism is also leading to difficulty in keeping up mortgage repayments and finding tenants, resulting in more empty properties.
Mike Colmans, underwriting manager, property owners, Norwich Union, said: "Landlords and agents should apply risk control measures at the time a building is vacated, particularly to manage the biggest two threats to an empty property - fire and malicious damage. Implementing such strategies could reduce a property owner's insurance premiums.
"Norwich Union has teamed up with Orbis Property Protection Ltd to provide integrated property and security services, designed to provide peace of mind to property owners. Through this relationship it will be possible to have access to discounted services to help minimise the risk of arson or malicious damage to empty properties which will satisfy duty of care responsibilities, protect third parties and restore and maintain the external appearance and grounds of buildings.
"It is, however, also imperative that the building is insured correctly in the first instance. Underinsurance is a widespread problem, especially with the impact of the credit crunch or where access to finance is restricted.
"It is vital for a professional valuation to be done on a property and Norwich Union strongly recommends valuations to be carried out by a trusted member of the Royal Institute of Chartered Surveyors."
Colmans suggests a number of ways that property owners can ease the worries associated with having an empty property and reduce the risk of having to make a claim:
- All policies stipulate certain requirements that must be abided by and properties owners should acquaint themselves with these to ensure that they comply with the policy. For example, conducting regular inspections.
- A weekly log of such inspections should be kept, giving details of repairs that are needed along with all arrangements made for repairs to be done and any defects that could potentially deteriorate further.
- Attending immediately to any minor damage to the building is imperative, as if it is left untouched it can easily worsen or even become dangerous.
- Removing all waste and combustible materials such as gas cylinders, from both within and outside the premises, is vital, as well as any other hazardous items from the site.
- Security measures should also be introduced, if not already in place. Consider erecting perimeter fencing, hiring security guards, using security lighting and generally improving security using locks, grilles, CCTV and alarms.
- The more obvious measures must not be overlooked such as making sure that all water, gas and electricity supplies are turned off at the mains and, wherever possible, chaining and padlocking isolation valves.
- Seal up letterboxes to prevent mountains of post building up, which is a clear message to passers-by that a property is empty.
Comans adds: "Furthermore, a landlord also has a duty of care to anyone visiting the property, so failure to remove hazards or have sufficient warning signs within the property, could mean the landlord is liable for any injury."
Recently, an injured trespasser in an empty building received £650,000 compensation. In another example, a company had to pay £2.5 million to an employee who fell through a skylight in an empty building, according to Colmans.
For further information, please contact:
Sam Bramwell at Staniforth on 0161 919 8024 / 077381 96667 or Sally Leeman at Norwich Union on 01603 684 225/ 07789 270 677.
Notes to editors:
*Information sourced from Orbis Property Protection Ltd brochure.
Norwich Union is the UK's largest general insurer with a market share of around 15%, with a focus on insurance for individuals and small businesses.
It is a leading provider of life, pensions and investment products and one of the largest financial adviser (FA) providers. FAs provide over 70% of the company's long-term savings business in the UK.
In the summer of 2009 Norwich Union will change its name to Aviva. Aviva is the world's fifth largest insurance group and operates in 27 countries. Aviva is to become the customer brand worldwide, thus enabling the company to compete even more effectively on a global scale for the benefit of customers, staff, business partners and shareholders.
Norwich Union's news releases and a selection of images are available from Aviva's internet press centre at www.aviva.com/media