For business owners or commercial real estate landlords, there are numerous reasons why a commercial operation may need to close for an extended period. A storefront may be waiting for a new renter or shutter for weeks or months during large-scale renovations. The COVID-19 pandemic closed some businesses permanently, with owners left to determine how to keep their properties safe until they decide on their next move.
Even before the pandemic, vacant commercial properties plagued the U.S. Today, owners not only must endure a loss of income but also increased risk of illegal squatting, garbage dumping, metal theft, and fire or flood damage. As the proliferation of unoccupied units may not improve anytime soon, landlords must take a proactive approach to protect their properties through measures including vacant commercial property insurance.
How can owners properly safeguard vacant sites?
Commercial property is typically used for business purposes, mainly encompassing market segments such as industrial, retail, office, lodging, and amusement. With vacancy rates for all commercial office categories expected to remain at around 15% – and 20% for retail – in the U.S. until employment rises to pre-pandemic levels, commercial property owners must take steps protect their vacant and unoccupied building spaces.
Owners can take the following measures to protect vacant sites:
- Increase security: Webcams and other surveillance methods can be used with alarms to safeguard your property. Security guards, perimeter fencing, and steel doors are additional measures landlords can take.
- Increase inspections: A heightened inspection routine can encompass security of doors, windows, and other openings.
- Utility shut offs: Turn off gas, electricity, and water to avoid flood or fire mishaps.
- Prevent theft: Remove all valuable items from the premises.
- Keep it clean: Make sure the site stays clean, with a particular focus on the removal of combustible materials.
- Prepare for the worst: Ensure the proper level of vacant property insurance covers your building in the event that incidents do occur.
Whether undergoing a scheduled vacancy or facing an unprecedented shutdown, owners are wise to determine precisely how their facilities will be inspected and maintained during the closure period. Identify responsible parties, inspection process details, and how inspections will be tracked and monitored.
Landlords should schedule regular site visits centering primarily on vandalism and equipment upkeep. Key maintenance tasks comprise checking lighting systems, fire safety equipment, water systems, HVAC, access controls, and exterior walls and accessories. Conducting routine maintenance can protect your property against undetected failures that can result in costly damage.
In case of the worst: vacant commercial property insurance
Following property insurance best practices is key to mitigating risks. Notify your property insurer immediately after a location is vacated. Failure to do so could stop payment of future claims.
Landlords may be covered for a sudden vacancy in cases of tenants’ properties going into administration. Immediate notification of these claims will ensure an agreement is reached.
Meanwhile, the property owner should speak with their policy provider to understand coverage for areas such as garbage dumping, squatter removal, and break-ins. Landlords can be held liable for people injured when entering a vacant property – this is particularly an issue when children illegally access an unused site.
Vulnerable properties need the right amount of vacant property insurance
Given all the intricate details building owners must manage, it’s not surprising some minutia can fall through the cracks. Even a minor mistake in securing or maintaining commercial property can result in a costly damage, a lawsuit, or a harmful hit to a company’s reputation.
Vacant properties are especially vulnerable, meaning owners must obtain the appropriate level of commercial property insurancefor their protection and peace of mind. Be sure to go over your insurance coverage with a qualified agent who can help identify potential risks beyond the terms of your current policy.
With empty commercial spaces becoming more prevalent in recent years, property owners need to take steps to protect themselves. A vacant commercial property insuranceplan, combined with preventative maintenance and security efforts, is vital to safeguarding your investments.
Get the most out of your business investments by insuring them carefully. The skilled and experienced agents at McGowan Risk Specialists can help craft a comprehensive and customized policy to protect your important investments.Contact us for more information on how to protect your commercial property.