Vacant land insurance

Owners of vacant land or lots may not consider the potential risks of being uninsured. However, you could be liable if someone gets hurt whilst on your land, even if they're not meant to be there. Similarly, if someone suffers damage to their property as a result of your ownership of the vacant land, you could find yourself being sued. Luckily, you can protect yourself against these risks by taking out public liability cover.

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Your quote may vary depending on the needs of your vacant lot situation.

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What are the key risks of being uninsured?

If certain activities take place on the vacant lot, you are at increased financial jeopardy.

• Foot traffic. Pedestrian traffic, while seemingly harmless, has a risk. If someone walking on your property happens to trip and fall, you may be held financially liable or even sued.
• Recreational activities. Allowing sporting endeavours has an even greater risk of someone being injured on your land. If you allow activities like hiking, biking, fishing, etc on the vacant property, you'll need to get cover.
• Your vacant lot is an urban area. If your vacant land is in an urban area, it's highly likely that foot traffic will occur on the property. As a result, the likelihood of someone tripping and falling increases. Also, if you choose to rent your land out for parking and an accident occurs, you could be liable for any damage.

What types of insurance should I consider?

There are several types of insurance to consider for a vacant lot depending on its use and location.

Third-party damages and injuries

Public liability insurance will protect you and your assets against liability for third-party injuries, damages or even death occurring on your land. This type of insurance can also cover activities that may occur in cities such as parking rentals.

If employees are involved in your vacant lot (e.g. security)

Did you know that even if you're not a business owner but part of management as an officer, director or senior manager, you assume financial risk for your employees? For example, say the business where you work also owns a vacant lot next to the building, and the employees use the lot to move equipment around. If an accident occurs due to lack of safety procedures and one of your employees gets injured, you, as part of management, can be included in a lawsuit. Management liability insurance is available that protects both the business's owner and its leadership from such a scenario.

If you have equipment on the lot

If equipment or other items are on the vacant lot, contents insurance will cover those assets. Vandalism and fire are two events that your policy would cover.

How can I get insurance for vacant lots?

There are two main ways to obtain insurance cover – through a broker or online.

• Brokers can be a good option if your insurance needs are complex. A broker offers a single point of contact who can work with you to determine your specific needs and circumstances. Because brokers represent many different insurance companies, they can comparison shop for you so you can receive the coverage you need at a competitive cost. However, brokers earn commissions from insurance companies when they sell their products. Commissions can sometimes cause brokers to present products that you don't need, leading to higher cost and being over-insured.
• Obtaining insurance online offers numerous benefits, with convenience being one of the top benefits. Insurance-related online search engines enable you to compare and see the cost and coverage immediately. After selecting the appropriate coverage, you then work directly with the insurance company. Shopping for insurance online cuts out the broker middleman and can potentially save you money.

How can I minimise the risk on my vacant lot?

There are a number of steps you can take to minimise the risks your vacant property may pose. First, walk the property and identify potential hazards. Is the ground uneven? Are there areas where previous owners or trespassers dumped trash? You should then remove the hazards you found or post signs warning people of the potential danger. Finally, visit the property frequently and familiarise yourself with its normal state. This will help you determine if and when something is amiss so you can address it immediately.

Owning anything carries responsibility, and vacant lots are no different. This is why protecting yourself financially from untimely events that may take place on a property is a must. Public liability, management liability and contents liability are all smart options depending on the land's use and location.