Insurance Insights

Construction Risks Insights

The Risks of Vacant Property

A vacant construction site may appear on the surface to be a harmless, inactive piece of property. But the truth is, theft, trespassing, fires, vandalism or other losses are constant threats.

Losses of this nature might include not only the value of damaged or stolen materials, but also the liability of 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’s important to know what risks you face. In addition to obtaining appropriate insurance coverage, there are numerous preventive strategies you can adopt to maintain vacant properties in a way that reduces risk and liability.

Potential Risks

Like any vacant building, vacant construction sites are first and foremost an obvious target for theft, trespassing and vandalism. Keep in mind that contractors can be held liable for injuries sustained by children that trespass or play on these sites. Moreover, vacant construction sites are susceptible to fire. A study by the U.S. Fire Administration reveals that each year, an estimated 4,800 construction site fires cause $35 million in property loss. In most of those cases, the sites are vacant. It’s also important to note that firefighters on construction sites are twice as likely to be struck by debris or objects than firefighters in residential fires.

Strategies to Help Mitigate Risk

In addition to purchasing coverage, there are some simple steps that contractors can take to limit their risk and liability.

  • Prevent vandalism – Leaving construction sites properly lit and with sufficient signage can help keep thieves and vandals out.
  • Limit liability – Make sure the property is free of significant hazards that could cause injuries to anyone on the site, including police officers, maintenance workers, firefighters or even trespassers. Walls, equipment, ditches and other physical features could be classified as attractive nuisances should they cause injury to anyone on the property.
  • Avoid damage – Remove all excess material and combustibles from the site. Inspect the site regularly for potential fire hazards and remediate them as soon as possible.

Talk to a Construction Insurance Expert

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 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. But it’s important to look beyond the price and consider the suitability and comprehensiveness of the coverage provided.

To learn more about the risks associated with vacant property, or to obtain vacant property insurance, talk to the construction insurance professionals at VTC Insurance Group. To reach a VTC agent near you, call 248.828.3377 or visit vtcins.com.

This blog is for informational purposes only and is not intended as legal advice.

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