So my commercial building has become vacant…what’s the big deal?

When a building is vacant, a small problem can quickly become a big problem. For example, a property in my neighborhood became vacant last fall. The bank that owned the property was out of state and did not have anyone in the local area to check on the property. One winter day a neighbor noticed a frozen stream of water coming from below the front door. You guessed it. A water line had frozen and burst on the second floor, flooding the property.

When no one is in a building on a daily basis, any minor problem that could have been noticed quickly and taken care of could turn into a major problem!

Another concern is vandalism or theft. A property that is vacant is an easy target for those looking to deface or destroy property.

So how does a vacant building affect your insurance, and what can you do to prevent/reduce a claim?

1. Coverage. Many commercial policies have a vacancy provision that will limit the coverage if the building has been vacant for a certain number of days and may limit the causes of loss. For example, they may not pay for any loss or damage caused by vandalism or reduce the amount that would have otherwise been paid.
2. Cost. Your insurance carrier may want to increase your deductible as well as increase your premium. That’s more out of pocket cost for you.
3. Security. It’s important to have security in place to deter those looking for trouble. This could mean installing a security system or simply having personnel that checks in on the property.
4. Utilities. Generally, water should be shut off and pipes drained. An exception would be when maintaining a sprinkler system that could prevent a large fire loss.
5. Heat. If the water remains on, heat should be maintained to prevent frozen pipes.

The longer the property is vacant, the more likely it is to suffer a loss. If you are dealing with a vacant property, be sure to discuss your situation with your local independent agent.

The information above is of a general nature and your policy and coverages provided may differ from the examples provided. Please read your policy in its entirety to determine your actual coverage available.

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