At the start of last month new legislation was introduced to make squatting illegal. Those charged with this offence could potentially face a large fine of anything up to £5,000 or even be sent to prison for up to six months. All well and good so far, but there’s a bit of a loophole: the new legislation only applies to residential properties.
This leaves commercial landlords suddenly much more vulnerable to squatting, particularly when the property is unoccupied. Threatened with imprisonment or an unaffordable fine, it doesn’t take a big stretch of the imagination to see that in future, squatters will simply leave residential buildings alone and start to occupy commercial spaces instead.
What makes things worse, is now that Winter is drawing in, the problem of squatting is only going to get worse, and some of the dangers associated with it will increase. For example, during the colder months squatters will naturally make fires to keep themselves warm. It goes without saying what kind of a risk unguarded fires represent to a landlord’s assets, so the simplest solution is to do as much as possible to prevent squatters setting up home in the first place.
With this in mind, insurers are going to be more insistent on clients taking the necessary precautions to prevent damage, so upon renewal or even earlier, expect commercial buildings insurers to start amending policies and applying certain warranties and conditions for maintaining cover.
These will be along two different lines, firstly increasing a building’s security will be looked at. Simple things such as boarding up doors and windows, frequent security inspections and maintaining a working alarm or security CCTV should be considered. Along with any alarm, if there are any sprinkler systems or other fire security systems, insurers will expect these to remain powered up and operational as well.
Secondly, the taking out or limiting of other facilities the building may have. For example, removing all combustible materials from the premises, shutting off the water supply (except to sprinklers of course), and other systems such as gas. As well as bringing down the risk of the building being damaged, these measures may also serve to make a building much less attractive to squatters who often abuse electrical and water supplies to meet their own needs. Without these in place, squatters may simply move onto an easier target that still has them.
Lastly, unoccupied property insurance policies vary hugely across the market. Some are extremely limited in the first place, covering only perils such as fire, lightning, earthquake and aeroplane damage, whilst others, at the moment, may still offer much more comprehensive cover, including cover for malicious damage. Whether this continues is anyone’s guess. Some insurers will undoubtedly withdraw such cover, seeing the risk as unacceptable, but hopefully that will mean others will see this as an opportunity to offer better value cover to their customers. Either way, obtaining advice from an insurance broker, such as Coversure, could prove to be crucial.