Yutree Insurance

Check your cover – and your tenants

Jul 28, 2012

The number of cannabis farms is on the rise. All property owners should check their insurance cover to ensure that illegal activity is not excluded.

According to a recent report by the Association of Chief Police Officers (ACPO), an average of 21 cannabis factories were found every day in Britain last year.

The number of farms discovered last year increased to 7,865; more than doubling in the last four years.

The menace of cannabis farms is an increasing problem. Property owner and investors are a clear target as the police authorities advise that more and more of these ‘farms’ are cropping up in private rented houses. There are an increasing number of claims relating to malicious damage by tenants that turn out to be related to cannabis farming. In particular, there are a number of claims where fires have been caused by overheating or faulty lighting used for growing cannabis or where properties have suffered water damage from hydroponic installations.

Landlords need to carry out thorough checks on their tenants before the property is rented and increasingly insurers are requiring landlords to obtain written employers references and obtain verified records of bank accounts. We’re also seeing more insurers asking landlords to maintain a log of property inspections before considering claims for damages resulting from such incidents. Indeed some have gone so far as to exclude liability for such damage entirely and it is therefore essential that clients review and understand their policy cover with their broker to ensure that they understand the potential risks and take the necessary steps to mitigate them. Failure to do so could result in declinature of liability by an insurer.

With thanks for the background to our claims partner, QuestGates Ltd

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