With the number of cannabis farms on the rise, QuestGates urges brokers to check the covers held by their property owner clients to ensure illegal activity is not excluded.
According to a recent report by the Association of Chief Police Officers (Apco), an average of more than 21 cannabis factories were found daily in Britain last year. The number of farms discovered increased to 7,865, more than doubling in four years.
Simon Jones, head of QuestGates Property owners division comments: “The menace of cannabis farms is an increasing problem and property investors are a clear target as the police authorities advise that more and more of these ‘farms’ are cropping up in private rented houses. Certainly we’ve been involved in a growing number of claims relating to malicious damage by so-called tenants that turn out to be related to cannabis farming. In particular we have seen a number of claims where fires have been caused by lighting used for such purposes overheating or developing electrical faults or where properties have suffered water damage from hydroponic installations.”
He goes on to say: “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, obtain verified records of bank accounts. We’re also seeing more insurers requesting 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 brokers both review and understand policy cover in this respect to ensure that their property owner clients understand the potential risk and take the necessary steps to mitigate them. Failure to do so could result in declinature of liability by an insurer if a problem does occur.”
