Opinions on requirement for insurance

[Gazz]

Hi all,

I would like to get some opinions on the requirement for insurance for a development site.

I own a rental property that is vacant and due to be demolished in a months time. Following that the block will be vacant for up to 6 months while I have headworks installed and apply for titles to be issued. Following that I will have a builder build 3 units on the site.

Currently I have full landlords insurance coverage as the property has previously been rented out. Going forward through the development process should I continue to have have public liability and workers compensation insurance for the site? I assume that the demo company and builder have these insurances so I won't be liable while they are on site? That just leaves the period while the headworks are being installed and titles issued where I could be liable for any accidents on site but this is unlikely for a vacant block.

I'd be interested to hear whether others would take out insurance for this period.

Cheers

 

[Aaron_C]

Have you got permission from your mortgagee to demolish the house? Otherwise you are voiding their insurance.

 

[Gazz]

Yes, I have advised my the bank through which I have the mortgage about my plans to demolish and subdivide. I was surprised at their lack of interest in reviewing what I am doing. I was basically told that as long as the value of the subdivided blocks is more that the existing house/land I only need to contact them once the new titles are ready to be issued so they can attend to the paperwork.

I had given the bank estimated values for the completed development previously though and obtained pre-approval to borrow additional funds for the construction of the units so they may have taken that information into consideration.

 

[Ian (WA)]

Gazz,

Even though you have clearly made the effort to inform the bank, still get their ok in writing; it's like pulling teeth though. Ensure their mortgage handling mob officially endorse the demolition. Your request is guaranteed to send them into a tail spin, so be prepared for grief.

As far as insurance goes, yep absolutely get public liability for the block once cleared. It's a small price to pay especially if any work is going to be done prior to builders insurance becoming valid.

I ended up with an 'Aust Brokers' - Commercial/Retail/Industrial insurance underwritten by QBE ($10M P/L for $535.00).

The ins. broker I went through said he found difficulty in sourcing a P/L only insurer. When I first approached him about the proposed demo he indicated to me that I would not be covered under my L/L insurance; I can't remember why??? The reason at the time was plausible - I certainly didn't feel it was a shonky effort to get more commission on his part.

I'm not sure if your normal landlords policy would still cover P/L once the house is demolished; a good question to pitch at your current insurer.

Cheers!

Ian.

 

[willair]

Going forward through the development process should I continue to have have public liability and workers compensation insurance for the site? I assume that the demo company and builder have these insurances so I won't be liable while they are on site? That just leaves the period while the headworks are being installed and titles issued where I could be liable for any accidents on site but this is unlikely for a vacant block.

I'd be interested to hear whether others would take out insurance for this period.

Cheers

As long as you have a six foot high fence with all the safety signs to keep most out then it's only who comes on site,but iwould be having a talk too the insurance company because once the house is gone it's a whole different ball game,plus i don't have the data on work accidents on development sites but from my experience there is just the same level of danger in a vacant block, as with any other part of the development system,your better to be covered 100%,and everybody goes home safe each night,or your covered 99% and someone falls through the 1%..