A significant proportion of commercial property transactions are suffering from a lack of adequate liability cover, it has been claimed.
Home information pack (Hips) provider Richards Gray says that around ten per cent of such transactions have insufficient cover – leaving firms with commercial mortgages at risk of losing considerable sums of money.
A large number of companies choose to cut corners by using residential, environmental and water reports – and only have liability cover of up to £5,000, the Hips company says.
"We estimate that ten per cent of transactions do not have sufficient cover – and this is leaving the purchaser open to what could be a major financial loss," Richards Gray managing director Mike Richards, is quoted by mortgage website mortgageintroducer.com as saying.
"Quite simply, it is not a risk worth taking," Mr Richards added.
In the case of only being covered for sums up to £5,000, the purchaser can be left massively uninsured if anything goes wrong – and will be left to foot a bill of a possible £1.9 million.