What’s the difference between a Chartered Surveyor and a Surveyor?

What’s the difference between a Chartered Surveyor and a Surveyor?


The term Chartered Surveyor applies to a varied profession that can generally be summed up as advising on landed property. This can include people who have specialisms in everything from valuing domestic or commercial property, advising on large scale construction projects, evaluating the environmental impact of property development, assessing the physical state of land or property, and a myriad of other specialist areas in between.

As a Chartered Surveyor you must be a member of the Royal Institute of Chartered Surveyors (RICS), which includes passing their stringent qualifications, signing up to their code of professional ethics and undertaking thorough continuing professional development.

However many people may be surprised to find out that in the UK it is only the term ‘Chartered Surveyor’ that is protected, which means that anyone regardless of their level of experience and qualification can call themselves a ‘Surveyor’. This means that anyone styling themselves as a ‘Surveyor’ does not necessarily need to have even the most basic knowledge of their subject, have gained any relevant qualifications, undertaken any appropriate training or supervision or be governed by any professional standards and ethics.

How do you become a Chartered Surveyor?

To become a member of the RICS, and thus be able to describe yourself as a Chartered Surveyor, there are a number of professional standards that you must meet. These ensure that all Chartered Surveyors can be relied upon to provide the highest levels of expertise and professional standards.


In order to become a member of the RICS surveyors must have undertaken relevant academic qualifications and then passed the Assessment of Professional Competence (APC) Assessment. This is an on-the-job training scheme and final written assessment which provides industry-ratified proof of their competence.

Continuing Professional Development (CPD)

All RICS members must make an undertaking to continually update their skills and knowledge and thus remain fully professionally competent. A minimum of 20 hours of CPD must be logged by each member per year, of which at least 10 hours must be formal or structured CPD.

Ethics and Professional Standards

All members of the RICS must demonstrate that they:

  • Act with integrity
  • Always provide a high standard of service
  • Act in a way that promotes trust in the profession
  • Treat others with respect
  • Take responsibility

What protection does working with a Chartered Surveyor provide?

Firstly by choosing to work with a Chartered Surveyor you know that you are working with a fully and appropriately qualified professional who has completed relevant training and experiential learning, and who also undertakes continuing professional development to ensure that they are up to date with any relevant developments and legal changes in their field. This alone should provide peace of mind that you are working with the very best.

Also through being a member of the Royal Institute of Chartered Surveyors, members (and more importantly their clients) are covered by both the RICS Complaints Handling Procedure and each member firm must hold appropriate Professional Indemnity Insurance (PII).

RICS Complaints Handling Procedure

In the rare case that something does go wrong when you are working with a RICS regulated Chartered Surveyor there is an official and independent complaints handling procedure. Simply contact the RICS and once the compliant has undergone an initial assessment an investigation could be launched which will aim to provide a swift and unbiased resolution.

Professional Indemnity Insurance (PII)

As part of their membership of the RICS all Chartered Surveyors or their firms are required to hold an approved level of adequate and appropriate Professional Indemnity Insurance. This means that if a claim is brought against them by a client for a breach of their professional duty the PII will cover the cost of servicing the claim and providing appropriate compensation to that client. Therefore if for any reason you are ever left out of pocket due to the actions of a Chartered Surveyor you will be covered.

Eddisons is a leading firm of Chartered Surveyors providing specialist advice pertaining to all manner of commercial property requirements. Along with commercial property sales and auctions, and machinery and business asset sales, our knowledgeable Chartered Surveyors can provide professional valuations along with other property services including rating advice, occupier services, building and project consultancy and lease advice.

Contact us today for professional and reliable advice regarding all of your commercial property needs.

Written by: Website Editor on Tuesday 15/05/2018


What is the difference between RPI and CPI and how does this affect business rates?

What is the difference between RPI and CPI and how does this affect business rates?

The Retail Prices Index (RPI) and the Consumer Prices Index (CPI) are two different measures of inflation that are used by the government to calculate levels of savings interest, state pension and benefits rates, business rates and many other figures. Although RPI and CPI both measure inflation, they are calculated using different factors and methods and so produce different rates.

What is the difference between RPI and CPI?

The Retail Prices Index (RPI) calculates the rate of inflation by measuring the price of various everyday items along with housing costs such as council tax and mortgage interest payments. It uses an arithmetic mean, which adds the cost of all of the items together and then divides this by the total number of items.

The Consumer Prices Index (CPI) is calculated by measuring the price of hundreds of items that we regularly spend money on, but it excludes housing costs. A geometric mean is then used to calculate the rate of inflation, i.e. the prices of all of the items are multiplied and the nth root is taken of them, where n is the total number of items.

The main difference between these two methods is that the RPI is nearly always the same or higher than the CPI, in fact the RPI is usually around 1% higher than the CPI.

The CPI is also said to ‘better reflect changes in consumer spending patterns relative to changes in the price of goods and services’ (Office for National Statistics).

Why do we need both the RPI and the CPI?

Many people believe that switching to only using the CPI to inform rate decisions would be preferable as it represents a more realistic view of how inflation affects spending. However switching all calculations to the CPI could leave some people worse off. For example those receiving state pensions and benefits would be likely to see their payments fall, as could those who receive payments from savings bonds.

There is a growing argument in favour of the new CPIH which is calculated using the same geometric mean as the CPI, but also includes a measure of owner occupier’s housing costs, and is currently running at just slightly below the CPI.

How does the RPI and CPI affect business rates?

Prior to April 2018 business rates were set and increased in line with the RPI. However in the 2017 Autumn Budget, Chancellor Phillip Hammond announced that the new financial year would see business rates being calculated according to the CPI instead. This change has been designed to help the 5.5 million small businesses in the UK compete against the online retail giants that are having such a devastating effect on our high streets.

The announcement is expected to save UK businesses a total of £2.3billion over the next 5 years. Figures from the ONS showed the RPI rate in March 2018 at 3.3%, compared to the CPI which was running at 2.5% and the CPIH which was set at 2.3%.

The move has been widely welcomed by business groups such as the British Chambers of Commerce and the British Retail Consortium, whose chief executive Helen Dickinson said, “It’s clear that the chancellor has listened to the retail industry and the growing chorus from across business and commercial life who have spoken up in favour of action to mitigate rising rates bills. Crucially, this relief will unleash investment that retailers want to direct towards the needs of their customers.”

In addition to this Mr Hammond also said that the revaluations of non-domestic properties upon which their business rates are based will shift to taking place every three years, rather than every five, which will allow business rates to more closely follow inflation.

If, even with the impact of these changes, you are still struggling with your business rates there may be grounds for you to appeal your rating and potentially get it reduced. Eddisons are commercial property specialists and have a division devoted to Business Rates Assessment & Appeals. The Chartered Rating Surveyors at Eddisons have extensive experience of challenging rates that have been incorrectly applied by the Valuation Office Agency (VOA) across numerous industries. Our team invests both time and their high levels of expertise into forensically assessing your business before working with you to pursue an appeal. Our industry leading success rates attest to our expertise in this area.

Contact Eddisons on 0333 009 0433 for immediate advice concerning your commercial property needs.

Written by: Website Editor on Monday 14/05/2018


Government funding for Education: Healthy Pupils Capital Fund (HPCF)

Government funding for Education: Healthy Pupils Capital Fund (HPCF)


The Healthy Pupils Capital Fund is available to sixth form colleges, and small or single academies. It is intended to enable eligible educational establishments to boost their pupils’ health and wellbeing through enhanced access to healthy eating programmes, after-school clubs, and extracurricular activities that improve physical and mental wellbeing.

HPCF is funded by the government via the Education and Skills Funding Agency (ESFA), as part of the Condition Improvement Fund (CIF). The government has announced that £100 million of funding will be made available for the 2018-19 financial year, using revenue derived from the Soft Drinks Industry Levy – also known as the ‘sugar tax.’

Here we look at the government’s intention in providing this type of capital funding, what the money can be used for, and the bidding process for eligible colleges and academies.

Which educational establishments are eligible for HPCF?

Local authorities and larger Multi Academy Trusts (MATs) that are ineligible for the Condition Improvement Fund may receive an allocation from the programme, the size of which depends on pupil numbers. This allocation will be distributed by the responsible body to schools in the local authority, or academies within an MAT.

Standalone academies, sixth form colleges, and small Multi Academy Trusts will need to bid for funding from the healthy pupils capital programme, through the Condition Improvement Fund. Smaller Multi Academy Trusts are those with less than five academies, or fewer than 3,000 pupils in total.

What is Healthy Pupils Capital Funding used for?

The aim of this government funding is to encourage participation in, and improve access to, a number of activities that have a beneficial effect on children’s and young people’s health. Improving physical and mental health and wellbeing is at the heart of the Healthy Pupils Capital Fund.

  • Areas such as physical activity, healthy eating, mental health, and the aiding of medical conditions, will be targeted, with easier access provided to a wide range of extracurricular activities and
  • facilities, including
  • Sports halls and other sporting amenities
  • Playgrounds
  • Changing rooms
  • Dining facilities
  • Kitchens

Applying for HPCF via the Condition Improvement Fund

The Healthy Pupils Capital Fund is integrated into the Condition Improvement Fund (CIF), and bids are made in the same way. Funding will be made available in the 2018/19 financial year, with the closing date for HPCF applications being 12 noon on 14th December 2017.

Eligibility criteria are the same as for the Condition Improvement Fund, which incorporates projects focused on maintenance, condition, and expansion of buildings. Applications should be submitted to the Education and Skills Funding Agency.

Eddisons can offer professional advice on all areas of government funding for education, and assist academies, colleges, and other educational establishments to secure funding that makes a huge difference to young people’s lives.

For more information on the Healthy Pupils Capital Fund, and how to make an application, speak to our expert Building Project and Consultancy Team at Eddisons.


Written by: Ian Harrington on Thursday 12/04/2018


How to avoid disputes about dilapidations

How to avoid disputes about dilapidations


Dilapidations can be a contentious issue between commercial landlords and tenants, with disputes commonly arising at the end of a lease term. Dilapidations are essentially breaches of a lease covenant, and can be a costly issue if tenants fail to understand their liability in this respect.

If a tenant doesn’t meet their obligations as set out in the signed lease, they may become liable for the cost of extensive repairs, plus court costs if the landlord decides to take legal action.

A Schedule of Dilapidations will be sent to a tenant approximately six months before the lease ends, defining all repairs or refurbishment required. Commercial leases contain dilapidations clauses to protect landlords from the cost of repairing damage to their building, or having to reverse cosmetic alterations carried out by the tenant.

So how can both tenants and landlords avoid dilapidations disputes when a lease expires?


Understanding the obligations

To facilitate a smooth exit tenants need to be aware of, and understand, dilapidations clauses within a lease. Prior to signing they should seek advice on the ramifications of failing to meet their obligations, and obtain professional assistance if unsure about any aspect.

It’s also worth noting that, if a clause regarding Interim Schedules of Dilapidations is included, the landlord may send dilapidations schedules at various points during the lease term, in addition to the final schedule six months prior to exit.

Making preparations to repair or refurbish

By preparing to undertake repairs well before the end of the tenancy, both financially and practically, tenants can avoid disagreement with their landlord in respect of dilapidations. It’s advisable to build up a contingency fund throughout the lease term, covering the cost of some or all likely repairs.

In a practical sense, tenants can regularly monitor the state of repair of their building with a view to preventing further decline, whilst also helping to spread the cost.

Seeking help from a chartered surveyor

A chartered surveyor will explain the meaning and implications of any dilapidations clauses, and a tenant’s obligations under their lease. It’s a good idea to prepare a Schedule of Condition (SoC) prior to signing a commercial lease. This should include photographic evidence of the property’s condition before the tenant moves in, and be included with the lease agreement if possible.


Clear and specific lease clauses

To avoid misinterpretation or disputes over dilapidations, landlords should ensure their lease agreements are clear and specific. If a landlord wishes the carpets to be replaced at the end of a tenancy, for example, this should be specifically stated within any dilapidations clauses.

Similarly, if a new tenant wishes to make cosmetic alterations during their tenancy, and the landlord requires these to be reversed when the lease ends, this also needs to be stipulated. Even if only minor cosmetic changes have been made, they require financial input from the landlord to reverse, and can potentially delay a new tenant coming in.

Consider an Interim Schedule of Dilapidations

If landlords fear their tenant may not care for or maintain the property to an acceptable standard, it would be beneficial to issue Interim Schedules of Dilapidations to protect their interests.

The right to issue interim schedules should be included in a lease agreement, stating the ramifications for tenants who breach the lease covenant – a claim for damages that could potentially lead to court action, for instance.

As far as tenants are concerned, careful research and preparation are key to avoiding disputes with their landlord over dilapidations. Landlords also need to ensure their tenants understand the obligations defined in the lease agreement, and make clear the enforcement measures available to them if necessary.

Eddisons can provide further advice on how to avoid dilapidations disputes. Our expert team of chartered surveyors has extensive experience of dilapidations issues, and can work with tenants and property owners to reach a conclusion acceptable to both parties. For more information on mediation or other commercial lease issues, please contact one of the team.


Written by: Ian Harrington on Thursday 12/04/2018


Government funding for Education: Condition Improvement Fund (CIF)

Government funding for Education: Condition Improvement Fund (CIF)

The Condition Improvement Fund, or CIF, is a government-backed fund intended to assist academies and sixth form colleges improve the condition, safety and thermal performance of their buildings.

Applications for funding are made to the Education and Skills Funding Agency (ESFA), a government agency sponsored by the Department for Education (DfE). Priority is generally given to projects which relate to the condition, safety and thermal performance of academic buildings, although a small percentage of the overall funding is allocated for expansion applications to address a lack of curriculum space.

Who is eligible to apply for this type of funding?

Independent academies, sixth form colleges, free schools and Multi Academy Trusts (MATs) which do not consist of at least 5 academies and more than 300 pupils. pupils may apply. Likewise, schools with a signed academy order of 1st September of any year that is expected to covert to academy status by 31st March of the following year may also apply.

What can the Condition Improvement Funding be used for?

The CIF is intended to address two main project types – condition and expansion. The objective is to ensure that academic buildings are not only fit for purpose, but represent a safe and eco friendly environment in which to learn and study.

Condition projects

Condition based projects include high priority issues surrounding health and safety, such as removal of asbestos from school buildings, gas and electrical safety, or fire protection measures/installations.

Priority is also given to projects that ensure buildings are secure against adverse weather conditions. Typically, this includes roof repairs/refurbishments, the upgrade of windows and doors, or other external elements of a school building which are considered detrimental to the performance of the building.

Likewise, applications are considered for the replacement of Mechanical and Electrical installations which are now considered energy inefficient due to their age and performance. This includes boiler and lighting replacements.

Expansion projects

CIF bids for expansion projects are available for academies and sixth form colleges with an ‘outstanding’ rating from Ofsted, and providing all other criteria set by the ESFA notes are satisfied.

  • Expansion bids are based on the following criteria:
  • Projects related to increased admissions and overcrowding issues;
    Condition based projects which include expansion

Applying for the Condition Improvement Fund

Applications for CIF are generally heavily oversubscribed, so it is essential that the proposed project(s) is related to the funding priorities mentioned above. Applications are made via the Education and Skills Funding Agency portal, usually in December of each year. Successful academies will be notified in April of the following year.

To improve an academies chance of success, substantial evidence of the project need is required. This should generally include photographic evidence and independent third party reports which support the application text as to why funding is required. An academy PDS Survey data report is useful as this survey/report has been commissioned by the ESFA.

The applications are also assessed on ‘Value for Money’ and ‘Project Deliverability’. Therefore, budget costs and outline programme of works are required within the application.

For further information on the Condition Improvement Fund (CIF), or indeed, any other funding opportunities available for the education sector, please contact our Building and Project Consultancy Team at Eddisons for further information. Click here for more information


Written by: Adam Finch on Thursday 12/04/2018


5 Reasons Why Vacant Property Security is on the Rise

5 Reasons Why Vacant Property Security is on the Rise


These are just five of the reasons why it’s crucial to take action to protect your empty property, and quickly secure your asset.

1) Reduction in police numbers

The number of police officers in the UK has reportedly fallen by around 20,000 since 2009, alongside a drop of 40% in Police Community Support Officers (PCSOs) patrolling our streets.

This lack of police presence and visibility has removed a deterrent that may have once protected vacant properties, leaving owners exposed to a greater risk of their property being damaged, and incurring financial loss.

2) Rise in homelessness

Government figures show that 4,751 people slept rough in England in 2017, representing a rise of 15% from 2016. Furthermore, between July and September 2017, 15,290 households were categorised as statutorily homeless – an increase of 6% from the previous quarter.

This steep rise in homelessness and rough sleeping numbers places the security of vacant properties at risk. It can also have an adverse impact on the wider community by lowering other property values if a vacant building is vandalised or being used as temporary shelter.

3) Vandalism and arson

The potential for vandalism and fire-setting are significant concerns when a property lies empty. In fact, the British Security Industry Association (BSIA) states that “arson is responsible for more than half of the known causes of fire damage in commercial and industrial property.”

4) Asset stripping

Copper piping, the lead from roofs, and other metal fixtures and fittings, are an attractive commodity for thieves, but significant damage can also be done to the property in the process of asset stripping.

The potential for asbestos to be released in older buildings is a serious issue which can lead to expensive remedial action being required from the owner. Even after property repairs have been undertaken, however, thieves may continue to target the building knowing that it’s empty, and stripping it of newly installed metal fixtures.

5) Squatters

The legal process of removing squatters from a vacant property can be a costly and lengthy one, as commercial buildings don’t receive the same legal protection as vacant residential property.

Aside from the legal costs of removal, the potential damage inflicted on a property by squatters is a further expense that owners have to bear. As a property owner you also have a duty of care to anyone entering your premises, whether their intention is lawful or for criminal purposes.

Eddisons’ RemoteZone service protects vacant sites and properties. It offers you peace of mind that your building is safe and that you are doing all you can to mitigate the risks. Please contact our specialist team for more information


Written by: Charlotte Peel on Wednesday 11/04/2018


How to buy at an online asset auction

How to buy at an online asset auction

Online auctions are a quick and effective way to buy surplus machinery and business assets. In this guide to online auctions at Eddisons CJM, we’ll explain how to get started so you can commence bidding on our online auctions and sales.


Firstly, you need to find the assets that you want to buy. You may have received one of our auction alerts, showcasing an auction, or have seen one of our featured sales on Facebook, bidspotter or another advertising channel and click through to that specific page. NB: If you haven’t signed up already, we’d recommend subscribing to our auction alerts, so you will be the first to hear about upcoming auctions and sales.

If your first stop is the machinery and assets home page, then there are a few ways to find our current asset sales:

  1. use the “Auctions & sales” tab in the main menu navigation
  2. or use the “search function” to navigate to the listing of current sales or a specific item
  3. use one of the category searches to browse all items listed within that categoryWhen you visit the asset listing page, you’ll see that our online auctions include a full range of machinery and business assets – from cars & commercial vehiclessurplus retail stocks, through to more specialist metals processing equipmentplant & machinery or other industrial assets. These have been organised into different categories, to help you find the type of assets you are looking for more quickly.

Bidding Account

Once you have found the assets that you want to make a bid on, you’ll need to ensure that you have an account set up. You can set-up a bidding account, or login, by clicking here. It’s a FREE service and there is no ongoing charge for bidding or watching our online asset auctions. Follow the onscreen instructions and complete the required fields. You should then receive an email asking you to verify your email address.

Register for an auction

Registering for an auction is quick and easy. Just follow the four steps below:

1. Sign in to your account
2. Select the auction you wish to bid on under “auctions” then “current auctions”
3. Click “connect to auction”/ “register to bid”
4. Follow the steps to complete your sign-up.

Before you can make a bid you may be asked for card details, which will be used if you are the winning bidder.

You’re now ready to start bidding. Good luck.

NB: Bidding at auction is a contractual commitment to buy and, unlike online shopping, you can’t return items you bid on unless they’re materially different to their catalogue description.

Commercial Property in a pension – pros and cons

Commercial Property in a pension – pros and cons


If you’re thinking of adding commercial property to your portfolio to augment your pension you need to be aware that there are both good points and bad points. We take a look at some of the pros and cons so that you can make an informed decision.

Self Invested Personal Pensions (SIPPs)

Since the early 1990s it has been possible for individuals to choose where they invest their money for their pension, avoiding the traditional route of ‘packaged’ pensions and taking advantage of greater choice and flexibility. These Self Invested Personal Pensions (SIPPs) are now a popular choice for people planning for a comfortable retirement.

The pros

Among the benefits of SIPPs is the ability to hold commercial property in a portfolio to enhance any company pensions you may have. This potentially helps you benefit from attractive rental yields as well as strong capital returns.

Rental yields stabilised this year, and with the possibility that positive growth in capital values may be seen towards the end of 2017 capital growth remains one of the attractions for investing in commercial property.

There are also tax advantages to holding commercial property in a SIPP. You will pay no income tax on rental income, for example, and if you sell the property you will pay no Capital Gains Tax. Commercial properties held in a SIPP also fall outside your estate for the purpose of Inheritance Tax. In addition, if you pay VAT on the purchase of a commercial property, you can reclaim the money you have paid via a SIPP which is registered.

Other benefits include your commercial property being protected against creditors in the event of business or personal bankruptcy, the lack of corporate or individual liability on SIPP loans, and the ability of a property to be transferred to a beneficiary in the event of a SIPP holder’s death.

The cons

Downsides to holding your commercial property in a pension include some strict rules which you must abide by. For example, commercial property held in a SIPP cannot be used as security for any loans to property companies which you may own, thereby limiting your financial and investment options. SIPP loans also tend to be short term, which can make them prohibitively expensive. In addition, the interest on such loans does not qualify for tax relief.

If you own the building and run a business from it, you are legally obliged to pay the full market rent and if you fall into arrears, the operator of the SIPP can and will pursue you until the arrears are paid in full.

If you rent out your commercial property to tenants other than your own company, there is the possibility that they may default on the rent, or that you may have prolonged periods where the property is not tenanted at all. In these circumstances, you may have to make additional payments to your SIPP from another source of income, or risk having to sell the property, potentially under circumstances which are not fortuitous.

You must also consider the costs incurred in holding a commercial property, whether it is tenanted or not. These include business rates, service charges and any management fees which may be due.

Finally, reliance on a single commercial property in a SIPP may not offer proper diversification which leaves it open to poor performance and a reduction or lack of income for the owner.

If you’re considering holding commercial property as part of your pension you advised to seek professional independent advice before making a decision. If you would like advice and information on any aspect of investing in commercial property talk to a member of our team.


Written by: Robert Diggle on Monday 18/09/2017


How to calculate property yields and return on investment

How to calculate property yields and return on investment


Knowing exactly how much profit a commercial property will bring you is a vital component of the buying decision. We look at how you can calculate the yield and return on investment (ROI) so you can make an informed choice.

What is rental yield?

There are two forms of rental yield: gross yield which omits costs and expenses, and net yield which omits figures such as interest rates, maintenance costs and periods when your property may be vacant.

Rental yield is a method of calculating the ROI on your commercial property using how much rental income the property is likely to bring, over the true cost of purchasing the property. If you’re considering a Buy-to-Let property the yield means how much annual income it will generate as a percentage of the value of the property.

By using rental yield as a yardstick you can compare different properties before you buy in order to compare how much return you’re likely to make.

Making a calculation

Calculating the gross yield: the gross yield simply means how much ROI you will make before any expenses are deducted. It’s calculated by this simple formula:

Annual rent ÷ property value x 100

So, if the annual rent you expect to make on a property is

12 x £892 pcm (the UK average as of January 2017) = £10,704

And that figure is then divided by £216,750 (the average cost of a house in the UK as of September 2016) x 100 the gross yield will be 4.9%.

Calculating the net yield: the net yield will give you a figure for the ROI after you have deducted your expenses. You can calculate it like this:

Annual rent (using the same figures as above) = £10,704 – operational costs (purchase price, transaction costs, letting fees, maintenance and repair costs, mortgage interest and insurance etc) = £8,359 (average as of April 2015) ÷ property value (£216,750) x 100, the net yield will be 1%.

Clearly, the higher the percentage, the better, and please bear in mind that these calculations are based on the UK average – in your specific location and in your own individual circumstances, the figures will inevitably work out differently. Experts suggest that any figure above 7% (net yield) is a healthy ROI.

If you need advice on any aspect of purchasing a commercial property or are concerned that your current property is not delivering on its ROI potential talk to a member of our team. We can offer professional, current advice on getting better value from your mortgage as well as rental management services among other things.


Written by: John Padgett on Tuesday 25/04/2017


Open Cover Insurance

Open Cover Insurance


For many owners of commercial property, arranging Open Cover insurance can prove problematic. We take a look at the main points to watch out for.

There is always an element of risk involved with arranging insurance contracts. A methodical approach to the transfer of operational risks involves identification, assessment and quantification. The challenge, however, is not to rely on the comfort of ‘Day One’ cover, but to recognise how your needs can change and to ensure that your insurance is capable of responding accordingly.

Pre-appointment reliability?

Before you arrange cover, consider the pre-appointment policies involved. Due diligence is vital to ensure that the Insurer has access to all material facts before cover is issued, in case of a future dispute. A wise commercial investor will clarify the response position should a company enter administration. Try to arrange cover via an Insolvency Insurance facility which will be mindful of previous cover and costs.

Getting the correct cover

Most Open Cover insurance facilities provide up to 30 days blanket cover. During this time, the IP establishes what cover is required and informs the broker, usually via a questionnaire. IPs should ask for clear recommendations on appropriate cover to avoid either over- or under-insuring.

Cost vs cover

Open Cover is often criticised for the cost of the premiums, particularly when estimated realisations are low. If this is the case, it’s important to establish whether cover has been arranged on the correct basis.

Ask questions such as: Would the building be reinstated in the event of a loss? Does the appointment include vehicles? Have premiums been market-tested? Can premiums be recovered from tenants in accordance with the terms of the lease?


While many insurance contracts and Open Cover facilities require the insured to adopt ‘reasonable precautions’ they also introduce warranties or conditions which risk the contract not responding in the event of a loss, particularly in relation to vacant properties. The advice, therefore, is to check the contract’s code of practice regarding vacant sites.

Insured sums

Commercial property owners run the risk of financial hardship if the insurance assessment is valued incorrectly. Make sure that your building is insured appropriately, either for reinstatement or at market value. A broker can provide further assessment valuations, if required, to ensure that claims do not fall short.

Insuring vacant buildings

If you’re insuring a vacant building make sure that the market value is not significantly above the reinstatement value. Other considerations include whether the building is listed, if the lease has reinstatement obligations, whether the building would need to be reinstated to facilitate a sale and whether the value is in the land, not the building itself.

Checks and balances should always be in place when arranging insurances, and risk management must be at the forefront of your mind. A good working relationship between IPs and brokers is essential to avoid operational exposure. Here at Eddisons we pride ourselves on providing clear advice on appropriate cover, as well as a wide range of other services, including taking on the responsibility for vacant property compliance. If you need advice on any aspect of Open Cover insurance, speak to a member of our team.


Written by: Nick Towns on Wednesday 31/05/2017