The Risks of Vacant Property
Theft, trespassing, fires and other losses are constant threats on vacant construction sites. Losses might include not only the value of damaged or stolen materials but also the liability from an individual being injured on the property and the loss of time if a crucial piece of equipment is damaged or stolen. The insurance risks and liabilities associated with vacant construction sites can be extensive. To ensure that you are adequately protected, it is important to know the risks you face. In addition to purchasing comprehensive insurance coverage, there are numerous preventive strategies you can adopt to maintain vacant properties in a way that reduces risk and liability.
Like any vacant structure, vacant construction sites are first and foremost obvious targets for theft, trespassing and vandalism. Keep in mind that contractors can be held liable for injuries sustained by children who trespass or play on vacant construction sites. Moreover, vacant construction sites are susceptible to fire. Firefighters on construction sites are twice as likely to be struck by debris or objects than firefighters in home fires are.
Other Ways to Mitigate Risk
In addition to extending coverage, there are some simple steps that contractors can take to limit their risk and liability.
- Prevent vandalism – Keeping construction sites properly lit and posting sufficient signage can help keep thieves and vandals out.
- Limit liability – Make sure property is free of significant hazards that could cause injuries to anyone on the property—this could include police officers, maintenance workers, firefighters or even trespassers. Walls, equipment, ditches and other physical features could be classified as attractive nuisances should they cause the injury of anyone on the property.
- Avoid damage – Remove all access material and combustibles from in and around the site. Inspect the site regularly for potential fire hazards and remediate them as soon as possible.
Builder’s Risk Insurance
Many times your contract with the property owner will require you to purchase builder’s risk insurance, which protects the property and any insurable materials you may have on-site against fire, vandals, lightning, wind and other similar forces while it is under construction.
Because of the increased risks and liability associated with a vacant site, these types of insurance tend to be costly. It is important, though, to look beyond the price and consider the suitability and comprehensiveness of the coverage being purchased.
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