A building may be one of your most valuable assets. That asset can be used for office space, warehouse or manufacturing. For a variety of reasons, investors and owners may own a building that is vacant. A vacant building has a unique set of insurance issues.
Consider how the insurance industry defines vacant. A building is considered vacant if less than 31 percent of the building’s square footage is in use. A building is in use when it is leased, subleased or being used by the owner to operate a business. You can obtain vacant building insurance to protect your asset.
Note that a building under construction or renovation is not considered to be vacant.
Keep in mind that the longer a building is vacant, the more likely some sort of damage might occur. As time goes on, more people notice that a building is vacant. This issue increases the likelihood that someone will attempt vandalism of theft.
If a building is not properly maintained and cleaned frequently, there is a higher risk of mold or other environmental issues. These events can decrease the value of the building, and also create a health risk for people entering the building.
If your building has been vacant for more than 60 consecutive days before a loss occurs, your coverage may be sharply reduced. For example, your policy may not provide any coverage for vandalism, water damage or theft. Other losses due to fire and storm damage may be reduced by a certain percentage. If the vacant building does not have consistent maintenance or a security presence, the building is more at risk.
The time your building remains vacant is a critical factor in your insurance coverage.
Apartment Buildings and Strip Malls
Vacant building insurance can also be secured for apartment buildings. In this case, you may have some apartments vacant, while others are occupied. If units are left vacant, the occupied apartments surrounding that vacant unit may be at a higher risk of theft or vandalism. If someone attempts to enter a vacant apartment, they may also try to access occupied apartments. You can purchase liability coverage for both vacant and occupied units.
A strip mall, or a similar structure containing multiple stores, may have the same issues as an apartment building. Vacant stores may raise the risk that occupied stores experience vandalism and theft.
If you’re concerned about your liability and the risk of a decreasing value for your building, speak with an experienced insurance company. Fusco & Orsini can help with these issues. The firm will use their years of insurance experience to create vacant building insurance plan that fits your needs. Request a free quote.
