Disaster can strike at any moment, which is why it is important for commercial landlords and tenants to make sufficient provision to cover themselves should the worst happen.
Empty warehouses and offices are particularly vulnerable to damage and fire risk when left unattended. And there are specific obligations, as Adrian Walsh, head of building consultancy at Bruton Knowles in Birmingham, explains.
“It’s not just a question of dilapidations for commercial occupiers. Getting the level of Buildings Insurance cover wrong could result in landlords or tenants having to contribute significant sums to reinstate the property if their insurance premiums don’t cover the cost fully. Reinstatement Costs should cover all works necessary to safely demolish, remove and rebuild the insured property and will include all statutory and professional costs associated.
“Adverse weather conditions can also make buildings susceptible to damage. The storms which ravaged the UK in November and early January should act as a stark reminder for policy holders to double check their policies to ensure the premiums will cover all damage caused.”
Adrian said relying on an old reinstatement assessment is risky and could result in discrepancies between premiums and actual cost of rebuilding.
“Conversely if the property is overvalued then the policy holder will be paying above the required premium for their insurance,” he said.
“Our advice would be to undertake a full assessment every three to five years which is supported by an annual online update.
“It’s vital that landlords and commercial tenants protect their assets, otherwise they risk spending more than they envisaged in the event of serious damage.”