Unoccupied commercial property insurance is bought far more routinely than its residential equivalent, because a commercial void is a normal part of owning commercial property rather than an unusual event. Units sit empty between tenants for months at a time, and the landlord is carrying rates, security and insurance on a building producing nothing. The insurance part of that is the easiest to get right.
What an empty commercial unit is exposed to
Metal theft above all: lead from roofs, copper from pipes and cabling, boilers and plant. Then water, from the theft as much as from the weather, because a stripped pipe run floods a building. Then unauthorised occupation, which is a legal problem as well as an insurance one. Then vandalism and arson in units that visibly look abandoned. Insurers price all four and their conditions address all four.
The security conditions, which are stricter than residential
Locks to a stated standard, windows and vulnerable openings secured or boarded, an intruder alarm on higher value buildings, and services isolated at the mains. Insurers frequently require the water to be turned off and drained, because a stripped pipe in an empty unit does more damage than the theft did. Some require a keyholder within a stated distance.
Inspections and who does them
Fortnightly is common and weekly is required on some buildings. Managing agents usually arrange this and the record should be part of the property file. Where a landlord manages their own units, the inspection is the condition most often skipped, and it is the first thing an insurer asks about after a water or theft claim.
Ending the void properly
When a tenant is found, the policy needs to change on the day the lease starts, and the new tenant's trade has to be declared because that is what the commercial property owners policy is rated on. A unit relet and left on unoccupied cover is misdescribed, and a unit relet to a takeaway on a policy written for an office is misdescribed twice.
Questions people ask about unoccupied commercial property insurance
How long can a commercial unit stay empty?
There is no limit, but a specialist unoccupied policy is needed once the unoccupancy allowance in the normal policy expires, and terms are usually three, six or twelve months.
Do I have to drain the water down?
Frequently, yes. Insurers require it because metal theft in empty units damages pipe runs and the resulting flood costs more than the theft.
Are business rates covered?
No. Rates on an empty unit are a cost of ownership after any relief period, not an insurable loss.
What about unauthorised occupation?
Insurance rarely covers the cost of recovering possession, though damage may be covered. Security conditions exist partly to make it less likely.