There are likely to be two principal insurance issues whenever you are considering renovating or refurbishing an empty property:
- issues arising from the works themselves; and
- the fact that - in many instances - the property may need to be unoccupied for the duration of the building works.
The issues are such that the standard forms of building and contents insurance may no longer apply and that cover may lapse or become severely restricted. To ensure that your property remains adequately covered, therefore, may want to consult a specialist insurance provider - such as ourselves at UKinsuranceNET - to discuss your particular needs and requirements.
An illustration of the specialist nature of the kind of insurance that might be required is given by the fact that the subject was included in a seminar held by the British Property Federation in April 2014.
The works themselves
When you are renovating a property, there are a number of aspects unlikely to be encountered during the normal occupation of either your own home or somewhere you have bought to let:
- you are likely to be host to an array of different builders, carpenters and other tradesmen;
- materials and equipment are likely to be left on site, attracting opportunists;
- the property owner's liability for personal injury or loss or damage to the property of members of the public may be greater; and
- the renovation works may result in (non-structural) damage to the property in question.
- Each of these risks is likely to require adequate insurance, whether in the form of employer's liability cover, public liability cover and adequate insurance for the structure and fabric of the property being renovated.
Even if your contractors hold their own insurance, for example, you may still require indemnity for your own liabilities with respect to their activities on site. If they are your employees, the law requires (in all but a very few cases) that you hold employer's liability cover up to a minimum of £5 million.
The lights may be on, but if there is no one at home for the duration of the building works, your property is likely to be exposed to a greater risk of vandalism, theft and the generally unwanted attention of others.
In addition, minor incidents that might otherwise be spotted if someone was in residence might go unnoticed until a major disaster is in progress.
An empty property, in other words, is likely to pose a greater insurance risk. Indeed, this is so widely recognised by many insurers that after a period of 30-45 consecutive days or so of continuous vacancy they reduce the cover available to a simple FLEEA basis (covering the risks of Fire, Lightening, Earthquake, Explosion and Aircraft) or consider the policy to have lapsed.
In the event of such works being carried out on your property, therefore, you may wish to consider the importance of renovation insurance to cover the increased risks arising from the building works in progress and, in all likelihood, the need for vacant property insurance to ensure that your unoccupied property remains comprehensively covered.