Vacant Property Risk Mitigation
2013
Kumu Kumar CEng MIChemE
Head of Operational Risk
London (Tower Place)
2MARSH RISK CONSULTING
Understanding The Risk – Vacant Properties
• Attract unwanted attention
• Can fall into disrepair
• Fire
• Flood
• Theft
• Vandalism
• Squatting
3MARSH RISK CONSULTING
Implications
• Insurers class as high risk, therefore high premium
• Effective risk mitigation can reduce this hike in premium
• Still have ‘duty of care’ to protect visitors on site, welcome or not
• Effective ‘mothballing’ will allow quick reinstatement
• Well maintained sites are easier to market
• Clients require reassurance
• Good risk management avoids negative publicity
• Values are maintained
4MARSH RISK CONSULTING
So - what do we do?
5MARSH RISK CONSULTING
Tell your insurer
• Becoming vacant is a significant change
• This change is a ‘material fact’
• Vacant premises are viewed as ‘high risk’
• Probability of loss increases
• Focussed risk management is required
6MARSH RISK CONSULTING
Risk Mitigation
• Assess the specific risks
• Evaluate relevancy
• Implement mitigation plans
• Measure effectiveness
7MARSH RISK CONSULTING
Security
• Ensure the property is secure
• Lock all openings
• Seal all letterboxes
• Account for all keys
• External doors must have BS3621 mortice deadlocks
• Consider boarding up doors and windows
8MARSH RISK CONSULTING
Prevention & Protection
• Isolate all services where possible
• Drain plumbing
• Leave sprinklers, fire detection, CCTV & intruder alarms in service
• Protect systems remaining live from extreme weather
• Employ water ‘leak detection’ technology
9MARSH RISK CONSULTING
Eliminate
• Clear all combustible materials internally and externally
• Remove all items considered attractive to thieves
10MARSH RISK CONSULTING
Guarding
• Review your security arrangements
• Ensure an appropriate level of security is maintained as agreed with your insurer
11MARSH RISK CONSULTING
Regular Inspection
• Inspect the property daily if possible, or at least weekly
• Inspect all internal and external areas
• Inspect using a specific checklist
• Keep a detailed log of all visits
• Keep a log of all deficiencies
• Rectify all deficiencies promptly
12MARSH RISK CONSULTING
Summary
• Risk management / new acquisition surveys
• Risk ‘Health Checks’
• Business Resilience
• Corporate Defence (Risk Management)
• Project Review
• Sprinkler design and Request For Tender generation
• Valuation
• Training
…..and if so, please get in touch!
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