Most property insurance policies restrict coverage on buildings that have been vacant beyond a specified period of time (usually 30 or 60 days). For example, a standard commercial property policy does not cover losses arising from vandalism, sprinkler leakage (unless the system has been protected from freezing), building glass breakage, theft, or attempted theft if the building where the loss occurs has been vacant for more than 60 consecutive days before the loss. Recovery for other insured losses is reduced by 15 percent under the same circumstances. It is important to call if a vacancy beyond a few weeks is anticipated. The insurer may be willing to waive the policy’s vacancy restrictions, particularly if precautions will be taken to protect the insured property during the period of vacancy.
It is also important to be aware of the policy’s definition of “vacancy.” Under a standard commercial property policy, if the insured is a building owner or general lessee, a building is considered vacant unless at least 31 percent of its total square footage is used by the building owner, a lessee, or a sub-lessee to conduct their customary operations. If the insured is a tenant, the vacancy provision applies only to the space leased to the insured, and this space is considered vacant when it does not have enough contents for the insured to carry on normal business operations.
As always, it is important to review policy provisions as each insurance company may have endorsements that change vacancy restrictions.