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How to responsibly manage your property risks

At a recent seminar that Cluttons hosted in partnership with NCVO, Nick Rudnai from CaSE Insurance highlighted the considerations for insurance as part of your risk management during your property lifecycle.

If you are moving in to a new premises, whether you have purchased or are leasing a property, these are a number of questions you should be asking as part of your risk management.

1

Prepare for your move

Valuation

If you’re responsible for the building then get a building valuation but avoid underinsurance which can reduce the amount you recover on any insurance claim.

Risks

Think about specific risks, for example:

  • Is security up to levels required by insurers?
  • Do you need insurers to cover theft where there is no forcible or violent entry (for example, where you share access or have areas open to service users)?
  • Are you moving into a flood zone?
  • Do you have any statutory responsibility for inspecting plant and equipment?
  • Will new or old premises be temporarily vacant or with only partial occupancy?
  • Are you planning to get any modification/improvement work done? Check the cover of any contractors (for their work, plant and tools, for any damage they cause to your premises and equipment, and for injury to your employees, volunteers or the general public).
  • Are your activities changing or will new activities be introduced at the new location (accommodation or canteen facilities, for example)? Think about any special risks which may affect employees, volunteers, service users, or interruption to your business (and review your Health and Safety arrangements).

Moving in/out

  • Review the BriefCaSE advice which CaSE Insurance produces on property moves
  • Check data security during the move, as this is easy to overlook
  • Insurers don’t cover normal wear and tear, so don’t anticipate any insurance recovery on dilapidations

Once you are in your new premises there will be a number of other risks that you need to manage.

2

Evaluate premises and non-premises risks

Be clear with insurers. What is permanently at the premises and what is likely to be used externally (at home, during travel, at exhibitions/events). Are you responsible for other property (visitors, general public)?

Keep an inventory and consider the need for ‘floating’ sums insured if you’re not sure that they will always remain at a single specified location.

3

Think about business interruption

  • What financial loss do you need to insure against in the event that your premises are damaged or destroyed, and for how long might you suffer that financial loss? 
  • Are you sure you need to insure for loss of anticipated income (in other words, are you likely to lose funding if you have to find alternative premises) or should you focus on cover for ‘additional expenses’ to help you through your business continuity plans, and to find and move into alternative premises?
  • Do you need to insure either your own on-going rent obligations to your landlord or loss of rent or hire charges which you receive?
  • Do you have concerns about denial of access to your building if nearby premises are damaged? 
4

Liabilities

  • Make sure that your public liability covers damage to third party property, including landlord and co-tenants’ property, and injury to third parties including service users. Tell your insurers about what you do and what particular risks may be involved (for example, parking, access and treatment).
  • Think about other areas of liability which may be relevant. For example, in the case of employees or volunteers with specific needs, have you made suitable adjustments at the new premises (access, workstation) to avoid a possible tribunal claim based on employment rights? 
  • Are there elements of the transaction or business decision relating to the property which exposes your trustees to increased risk of a claim against them (if so, talk to your Trustee Indemnity insurers).

This is a quick overview of some of the things you have to think about but mainly plan to speak to your broker early on and get good advice.

Further information

See how NCVO’s Trusted Partner CaSE Insurance can support you.

Contributors

Page last edited Jul 25, 2017 History

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