Clearly, there is a risk when a residential or commercial property becomes unoccupied. It is a magnet for graffiti artists, vandals and thieves and at LMI Group we are instructed on a number of claims, particularly around the theft of metals.
There are a number of basic things that a landlord should consider to minimise the risk of damage.
- Keeping up good maintenance of the property;
- removing any graffiti;
- mowing lawns;
- stopping the mail;
These are just some of the basics.
Having security cameras I find is a great deterrent, however often landlords turn off the electricity as a cost saving measure and to reduce the risk of fire. There are battery operated cameras that can be used and while I have not researched it, there may be the possibility of some solar powered ones as well.
I also think the use of security lighting is important, I’m not in favour of leaving the lights on constantly, however having a system where the lights come on when someone approaches the building. This is a far greater deterrent in my experience for thieves and vandals than having a light on all the time.
Finally, a good quality alarm system that is monitored 24/7 is again a great deterrent and if there is an attack or break in there is a greater chance of the thieves leaving before any real damage or theft occurs.
In one matter I am involved in, the thieves broke into a premises and there was a security camera aiming right at the door in which they broke. As the thieves walked in, the lights went on and we have a fantastic photograph of one of the thieves pointing to the camera while gesturing to his accomplice. The two then immediately turned about face and left but leaving us with a great photograph.
Yet another recommendation is to keep the property clean and this means a regular visit by a responsible person. At this time, security alarms, fire alarms, security cameras etc should all be tested.
One of the real issues with unoccupied claims is as I mentioned earlier, the theft of metals. We typically find two situations under an ISR. First, burglary and theft is defined and in other cases there is no definition and therefore the ordinary, everyday definitions of burglary and theft apply. The Sub-Limit is typically $20,000 and of course that goes nowhere when electrical cabling within an office or factory complex is stolen. Of course, it is not only the copper wiring, but copper pipes which can include fire protection systems and the like.
Thieves don’t particularly care about what damage they do and it can be malicious damage or water damage caused by the cut pipes. What constitutes theft and what constitutes malicious damage has to be addressed on a case by case basis. I have developed a careful methodology to address this which has been rolled out to all the claims team within LMI Group. The takeaway point for all brokers and property owners finding themselves in the situation with an unoccupied property is to ensure that the theft sub-limit is adequate to fully protect the insured in the event of one of these all too regular attacks.
While this post is particularly about the theft sub-limit, I feel it is important that all sub-limits be reviewed at each and every renewal or when there is a significant change in a risk, such as it becoming unoccupied.