When a business property becomes vacant, it is unfortunately quite often no longer eligible for certain insurance policy coverages, like theft and water damage. That said, if someone breaks in to steal supplies still remaining in the business dwelling, breaks glass, or a flood occurs from a broken frozen pipe, the owner is likely responsible for these costs. This makes vacant business property insurance crucial because it is a special type of policy to cover such risks.
What is a Vacant Business?
There are a number of reasons a business might be considered vacant. This usually happens when the property, for a period of 60 days or longer, remains unoccupied or rented for another purpose. This causes it to be more attractive to people who steal or vandalize property, which is why ordinary insurance no longer covers property damage. However, unoccupied does not mean vacant necessarily. The building also has to be cleared of furniture & fixtures to be considered vacant for insurance purposes.
What is Vacant Property Insurance?
Vacant property insurance is a special type of property insurance that covers a property once it is considered vacant. After other insurance policies no longer cover damage, like glass broken from vandalizing, stealing materials in the building structure, flood or fire damage, this policy commonly becomes effective. Most property owners will purchase this policy for the length of time they think their property will be vacant, such as before the next tenant moves their business in, or if they are making repairs to the building but plan to re-open their business. Coverage dates are usually between one month and one year.
When is this Insurance Required?
There are a few situations when a business might need vacant property insurance. This starts when not having occupants for 60-90 days, depending on original insurance policy’s terms. Other reasons include repairs are being made, property for sale and has been on the market for too long for other insurance to cover certain incidents, or if there is a new business that has yet to occupy the property. If any of these apply to you, you should consider protecting your business property, even if you won’t be occupying it for a while. You would still be responsible for damages.
What is Covered Under Vacant Insurance?
Some events typically covered by a vacant property insurance policy are water damage, fire, wind, hail, liabilities, lightning, natural disasters, manmade disasters, civil commotion, theft, and vandalism.
Tips for Businesses
Prevent theft and vandalism by making the property appear to be occupied, such as keeping lights on, having someone pick up the mail, keeping the grass trimmed, and parking a vehicle near the building.
Sometimes, having a business property vacant for a few months is unavoidable. Protect your business assets by getting this important insurance policy, if necessary.