Insurance and Drug Houses

25 May 2016


There is a worrying increase in the discovery of drug and meth labs across Australia, with hundreds of labs being found in residential properties each year.

Meth and drug labs can be found in urban to remote locations, from modest units to multi-million dollar houses in blue chip suburbs and, in a growing number of cases, it is property managers who are feeling the financial and reputational impact.

You will have no doubt seen many articles in the press recently about properties that have either been destroyed by explosions caused by meth and drug labs or suffered extensive damage due to the toxic by-products of these labs. The biggest concern of all is that the majority of cases are being discovered in rental properties resulting in a growing trend of claims occurrences.

Once a drug lab is detected, even in the absence of an explosion, the clean-up and remediation costs incurred by the landlord can amount to thousands of dollars in costs for specialist cleaners and, in many instances, landlords do not have any insurance to cover the cost of remediating the damage.

The longer a meth lab goes undetected, the greater the potential impact to the property, landlord and tenants. Risks include rental default or further loss of income, and future tenants could also face potential personal injury due to the exposure to and effect of drugs picked up on their skin or person.

Fortunately, Aon have recognised the growing trend and our landlords policy specifically includes cover arising from the illegal activities of tenants (including meth and drug labs). To our knowledge this policy is the only one of its kind. In the unfortunate event of one of your rental properties being involved in one of these matters, your client will have peace of mind knowing that cover is available for these types of claims and at no extra cost.

To learn more about Aon Landlord Insurance or to become a Landlord Insurance Distributor contact EAC on 1300 137 161

Leave a Reply