Since social distancing measures were introduced in March this year, many commercial premises will have been left unoccupied.
As Scotland gets ready to move onto phase 2 of the Scottish Government’s route map, many commercial organisations will be returning to unoccupied premises to prepare for re-opening.
It’s widely recognised that unoccupied business premises are susceptible to a greater risk of property damage. So what happens if you return to find your premises have been damaged? Can you recover the cost of repairing the damage or any related losses, such as loss of stock?
Damage caused by a third party
There may, of course, be situations where property damage has been caused by a third party. One common example is where an unoccupied property sustains damage caused by an escape of water from a property located above it.
In such situations, there may be a right of claim against the third party to recover costs, however, this is not an automatic right as, ordinarily, you will need to establish that the damage occurred as a result of the third party’s negligence. For example, if the damage was caused by vandals and you can show that the third party failed to properly secure their premises to avoid unlawful entry, that may be enough to establish negligence.
The early stages following the discovery of property damage are key to ensuring a successful claim can be made against any “at fault” party. Early intervention to prevent continued damage to property is crucial, as is a full and proper investigation into the cause. An investigation should at a minimum identify the cause of damage, the extent of damage to the premises, the identity of the third party, and whether the third party has public liability insurance coverage in place.
Taking such proactive investigative steps at an early stage should increase the chances of a successful claim being made.
Property insurance
It may be that the premises are insured for property damage, irrespective of whether the damage was caused by a third party or not, and a claim should be made to the relevant insurers. If you have cover, make sure to notify your insurer as soon as you can after discovering the damage. Failure to do so might invalidate your policy.
Many commercial insurance policies contain unoccupied premises clauses, which may have been triggered by the current COVID-19 restrictions. Such clauses place additional conditions on the owners of unoccupied premises, such as the need to check the premises routinely while they remain vacant.
The Association of British Insurers has advised that some insurers have relaxed their policy conditions, such as waiving the right to temporarily check on premises while ‘stay at home’ rules were in place, but the ABI has also cautioned that commercial property owners should discuss appropriate arrangements with their insurers.
Property damage claims and insurance issues that can arise can often be complex, and that may be particularly so during the COVID-19 pandemic, so it’s worth seeking legal advice to get clarity for your individual circumstances.
