Does This Picture Look Familiar? It Could Be Costing You Your Fire Insurance

Don’t Pay for Tenant Shortcomings: Preventing Property Dilapidation
15th December 2017
Mixing Drinks is a Recipe for Disaster, So Why Mix Tenant Incomes?
29th December 2017

As anyone who has put in a claim will know, insurers rarely want to pay out – but when an incident such as a fire occurs, securing that money plays an important role in getting your investment back. This is especially true in the world of commercial property management; if a property is damaged due to fire, landlords are keen to make repairs and recoup losses incurred in the process. But did you know that tenants are often unknowingly sabotaging the process?

Protecting Insurance Claims

A key component of any commercial tenancy agreement is the obligation to not act in any way which would invalidate the landlord’s insurance. Unfortunately, when it comes to fire insurance, many tenants are falling foul of this clause. The picture above, for example, is an all too common sight on commercial premises, with materials such as wooden pallets and tyres are improperly stored in areas where they constitute a fire risk. Similarly, failure to keep bins gated is counted as a fire risk – even though it might not make immediate sense to tenants.

By engaging in these behaviours – intentional or not – tenants are invalidating a landlord’s insurance, making it extremely difficult to claim successfully in the unfortunate event of a real fire, as well as putting tenants and visitors at risk. This scenario doesn’t end well for anybody involved, with the landlord missing out on compensation and tenants facing legal action.

Prevention as a Cure

In my experience within commercial property, the key to preventing invalidated insurance is proper management. This keeps both landlords and tenants on top of any fire risks, and protects future insurance claims from scrutiny.

This is a particularly important point when considering that insurers will carry out their own risk assessment on properties, as it ensures that they are not exposed to a high level of claims as a result of lack of maintenance and poor management. In many instances, insurance companies will eventually increase their compulsory excess in response to the high risk in covering these properties.

Carlton Park Management has taken a leaf out of the insurer’s book by conducting regular checks on our clients’ property. If we identify anything which constitutes a fire risk, we write to the occupier on behalf of the landlord and allow seven days for changes to be made. If standards aren’t met after that time, we can instruct solicitors to act upon this breach of contract. After all, the insurance invalidation clause is in the contract for a reason: to protect everybody involved – it makes sense to ensure it’s being met!

The Better Option

We’ve found that conducting our own spot checks works much better than leaving it to insurers, as a landlord’s record isn’t besmirched by anything we find, and tenant infractions can be dealt with internally. It’s a happy ending for everybody involved, and means we can successfully play our role in keeping people safe.

So, if you’re concerned about how seriously fire risks are being managed on your commercial property, as well as the impact it could have on potential insurance claims in the future, don’t hesitate to engage with a property management company that will act in the interest of all parties. In the eventuality of a fire, it could mean the difference between bouncing back and going bust.

Carlton Park Management offer commercial property management with a difference. We put personable relationships at the forefront of everything we do, and ensure that both tenant and client are well-looked after. To find out more, feel free to  explore our website, or to get in touch directly. We hope to hear from you soon!