Unoccupied Buildings - Guidance for customers

Unoccupied buildings continue to generate significant losses for Zurich Municipal caused mainly by deliberate fires, theft of fixtures and fittings and malicious damage. We have seen a number of recent claims that we feel may have been prevented if the properties were secured and effectively managed. In order to help our customers protect these properties, we have developed the following guidance to outline the level of protection we recommend for vacant properties. For guidance, our policy defines an unoccupied property as “vacant, empty, unattended or not in use”.

The key issues are:

• Unoccupied properties are vulnerable to fire, theft and malicious damage and need to be managed accordingly.
• It is important that vacant properties are declared to us and that the correct sum insured and risk information has been provided.
• The correct level of cover should be in place; particularly where full reinstatement is no longer appropriate. If the building is in poor condition or likely to be demolished or sold for development, then cover should be reduced to indemnity or demolition and removal of debris removal only
• We advocate a risk based approach to ensure that the level of security and monitoring regimes adequately reflect the potential risks.
• It is particularly important that we are advised about large or heritage buildings that are due to be closed as soon as possible, especially in the higher risk locations, so we can involve our Risk Engineering team to help provide bespoke risk management advice.
• Following any surveys, it is expected that any Important Risk Improvements are implemented immediately, or ensure any alternatives are discussed with us so that the building is protected effectively.

Risk based approach

We advocate a risk based approach to establish the level of protection required at each vacant property, because properties in different locations, different types of construction and former occupation will require different approaches. For guidance, the following table outlines the level of protection we require, based on the perceived risks and the declared value of the building. We have created 5 Risk Levels, based on the declared value of the building, its location, loss history and its construction. (Please note, individual assessment is required, however these provide a guidance framework to assist in identifying the level of protection required) For level 3 and above, the requirements need to be applied if any of the descriptors apply.

Policy cover

The policy defines an unoccupied property as “Vacant, empty, unattended or not in use” and generally the cover becomes restricted when the building has been unoccupied for 30 consecutive days. There are some perils where exclusions are applied to unoccupied property. In respect of escape of water and sprinkler leakage, the exclusion relates to the potential for water pipes to freeze if the building is not heated. This risk therefore needs to be mitigated by draining all water services in vacant property or ensuring that adequate ambient heating is still provided. If the building is fully sprinkler protected, please refer to your underwriter or Risk Engineering contact as it may be possible to maintain the sprinkler protection during the full period of the unoccupancy. Under the terms of the policy it is a requirement to immediately notify us when any building, or part of it, becomes unoccupied – see previous definition. We would, however, also encourage customers to advise us of properties that are planned for closure, especially school or large or heritage locations, so we can involve our Risk Engineering team, who can provide bespoke advice on property protection at an early stage. Each quarter, a full list of unoccupied properties must be sent to us.  This list should be updated each quarter to show any additions or deletions. The list should include the following information:

• Sums insured of each property
• Age and condition (including any listing)
• Details of loss history
• Details of Inspection regime and compliance with policy requirements
• What plans are in place – Sell, re-let, refurbish, demolish?

Immediate steps must be taken to protect the property (as outlined in the policy), but these are minimal requirements and for some higher risk properties, more stringent security protections may be required. The basic policy requirements are:

• Turn off all mains services (other than fire/intruder alarm systems)
• Isolate all services (other than for fire & security systems)
• Drain the water systems (or maintain heating at minimum of 5^oC)
• Inspection of the building, repair damage, remove any waste and deal with issues immediately
• Seal up letter boxes
• Secure the building by closing and locking doors and windows and setting any fire and intruder alarm systems

The risks and risk reduction measures

Fire

The most common cause of fire in the UK is deliberate fire setting (arson). Unoccupied buildings are particularly vulnerable as they are unattended and therefore become a target of thieves and vandals, who often also start fires. To reduce the risk of deliberate fires, it is very important to ensure that all material that could help to start and spread a fire is removed from both inside and outside of the building. The sites can also be vulnerable to fly-tipping, therefore it is also important that a regular inspection regime is implemented to ensure that any damage to the building or accumulations of waste and rubbish are quickly addressed. It is typical that once minor damage has been caused to a property or low level fly tipping takes place, this tends to escalate into more damage and larger incidents. Prompt repairs and waste removal are essential to minimise the risk of the property being targeted for further attack. Mains electrical services should be disconnected, other than circuits required for fire alarm or intruder alarm systems in order to minimise the risk of misuse or issues arising from a fault, such as fire or injury Contents and fixtures are often left in the buildings, which provide ready fuel for a fire and should be removed. Additionally any internal doors that are missing or left open should be repaired and closed. Such actions can assist significantly in preventing a fire from developing quickly and minimise damage in the event of a fire taking place.

Theft/Break-in

Theft of copper and lead is still a major concern and unoccupied buildings are a common and relatively easy target. Lead on roofs is particularly easy to remove and can lead to additional damage, should the theft go undiscovered. Water pipes and electrical wiring containing copper can be stripped out and sold on and its removal can cause extensive collateral damage. In both cases it is very difficult to trace the stolen materials and even recovery of the stolen items will have little effect on the cost of repairs.

Malicious damage

Malicious damage, including graffiti, is fairly common and if left, tends to lead to more and more damage often culminating in fire setting. It is important that appropriate regular monitoring is in place and any damage, even low level, is repaired immediately to avoid it escalating. It is imperative that incidents of malicious damage are dealt with promptly and notified to us. Patterns of repeated attack are proven to be a precursor of a significant event, unless determined efforts and security improvements are made to prevent further attacks.

Trespassers

Vacant buildings can present an exciting, but dangerous, playground to children; therefore it’s important to ensure that the buildings are secured against intrusion. If there are persistent problems with unauthorised access and the building owner fails to address this, then they could also be liable under the Occupiers Liability Act for any injury sustained by intruders, therefore the buildings also present an increased public liability risk, if not adequately protected.

Schools

Vacant schools pose a particularly high risk as they tend to be even more attractive to youths. This has been highlighted by a number of recent large fires. Such buildings are also often on large sites that are difficult to secure and may include recessed and isolated areas where people can gather out of sight of neighbours and passers-by, facilitating damage and break-ins to the buildings.

Unauthorised occupation and squatters

Unoccupied properties are also particularly vulnerable to unauthorised occupation by squatters, who not only cause damage to the building, but are notoriously difficult to evict, once they have gained entry. Squatting is now a criminal offence in residential properties, but remains a civil offence of trespass in commercial premises limiting the powers of the police to act. The squatters can be very well organised and often link together on social media to find suitable properties to occupy. Aside from the risks of deliberate damage being caused to the buildings their presence brings additional unintentional risk as they often try to set up lighting by tampering with electrical circuits and can bring in gas bottles for heating and cooking. Both of these things can significantly increase the risk of fire and therefore can also create fire safety issues with people needing to escape the building if a fire occurred. Other issues include unauthorised occupation by travelers and waste/fly tipping being dumped on the site. Removal of waste and site clearance in both circumstances can be very costly.

Asbestos

Asbestos in unoccupied problems can cause significant issues in the event of a fire which results from contamination and the need for specialist disposal of all waste. For buildings awaiting redevelopment or sale this can add significant delays. When assessing the cost benefit of fire safety & security controls the impact of asbestos within the building should be taken into account.

Heritage Buildings

Heritage buildings represent a specific risk in their own right. They are often located in remote areas and can contain combustible elements in their construction, potentially leading to significant fires. They can also often contain valuable fixtures and fittings, like ornate fire places and architectural features that can be targeted by thieves causing significant damage to the building structure, not to mention the permanent loss of the item itself.

Cannabis farms

The use of buildings to grow cannabis can vary in scale from the domestic, such as a room or loft in a flat or house being used to grow for personal use, up to full scale, commercial growing where all or substantial parts of large vacant commercial or industrial properties are converted by organised gangs intent on supplying the illegal drug market. In either case such activities pose a significant risk of damage and costs to the property owner in the form of fires, explosions, escape of water, structural damage and even asbestos contamination as a result of the setting up and growing operations. Rot, mould or infestation damage can also occur due to moisture from irrigation systems. Clear up and repair costs involved in forcing access to the property once discovered and removal of the growers plants, equipment and other growing media can also be substantial. Cannabis growers will often bypass the electricity meter in the property (in some cases even digging underground to hook up to external supplies such as lamp posts). This, along with the use of high powered (and hot) lighting, transformers, portable electric fans and the like – all installed with little consideration to safety – can increase the risk of fires from electrical faults.

Risk Management

Risk improvement requirements should take into consideration the plans for the building. If the building is going to be demolished, or is in a poor condition, cover can be restricted to indemnity or demolition and removal of debris only. Depending on the values of the building, this could be a saving on the insurance premium and would affect the level of protections required. Such cover restrictions should always be considered for buildings that are planned for demolition or that will be sold for development as full reinstatement cover is not required. Other cover restrictions may also be considered, including restriction of perils and increasing excesses (deductibles), but this depends on the condition of the building and the loss history.

Risk Assessment

Due to the varying risks faced by different properties in different locations, we recommend a risk assessment is completed to establish the level of protection required. The security measures should reflect the risk, using a probability – v – impact assessment, or in other words, an assessment of how likely is it that someone will want to break-in or damage the property and if they did, how bad could that damage be? This risk assessment should then drive what level of protection should be implemented at the site as it is accepted that boarding of doors and windows may not be appropriate for some high street locations. Higher risk locations should have more protection to reflect this increased risk. It is recommended that the risk assessment covers the following areas:

• Location – is the building located in a high risk area?
• Loss history – have there been previous incidents of malicious damage and fire?
• How vulnerable and attractive is the building to squatters or thieves?
• How easy is it to break-in?
• Type of building (eg is it a school or heritage building?

We also recommend that a documented shut-down procedure is in place for all vacant property, to ensure a consistent approach. This should include the removal of all combustible contents and waste, draining and turning off services, ensuring the property is adequately secured and that a suitable inspection regime is in place. Where the property is perceived to be a higher risk, then enhanced security measures will be required.

Doors and windows

All accessible windows and doors, should be protected to prevent intrusion. Timber (plywood) boarding is the basic level of protection, but it can be easily compromised and damaged, therefore proprietary steel systems are preferred as they provide a much higher level of security.

Site Access

Site access, particularly to prevent vehicles, may also need to be considered as this provides the first layer of defence. Fencing should be maintained and concrete bollards or large concrete blocks can be used to protect vehicle entrances. In very high risk locations, manned guarding and/or monitored CCTV may also be required.

Alarm systems

Where possible, the existing intruder alarm system should be maintained, but if this is not possible, temporary intruder alarm systems can be used to provide back up to physical security and these can be relatively cheap and easy to install. It is important to remember that and intruder alarm is announcing that someone has already gained entry, so they need to be supported by a quick and effective response. Professional keyholders are preferred to ensure someone is responding to the alarm activation.

Residential guardians

There are several companies in the UK who for a fee can supply residents to properties as an alternative to conventional security measures, by, in effect, providing people to occupy the building. These temporary residents, often referred to as guardians, have a temporary licence to occupy the property, typically in return for a rent they pay to the company, which is usually heavily discounted from the normal market rate. The residential guardians solution has been adopted in a wide range of buildings, including offices, community halls and commercial buildings. For these buildings, temporary cooking and washing facilities may be needed, which require careful consideration so as not to introduce additional risks. We take a risk based approach to the acceptance of guardians and whilst this may be considered an acceptable solution for smaller residential properties, we do have concerns for larger properties, especially those which have not previously been used for accommodation as alterations may be required to facilitate this change of use. We would recommend a fire risk assessment to be completed and it is also essential to check that the guardians are rigorously vetted by the guardian company. Failure to complete an adequate risk assessment could leave the property owner and the guardian company open to insurance claims and even prosecution. Customers who are considering the use of guardian companies should contact their underwriter or Risk and Improvement Consultant for specific guidance.

Survey requirements

Please note we will survey many vacant properties when they are advised to us; however it is recommended that steps are put in place to protect the property as soon as it becomes vacant, rather than wait for any recommendations from the risk survey. Our experience shows that incidents at these properties often start as soon as the property becomes vacant. Should you require further assistance then please speak to your Risk and Insurance Consultant or underwriter who will be happy to help you.