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contamination of groundwater and soil.
- Floods: Pipes can burst and sprinkler systems can leak.
Commercial Property Owner’s Insurance & Vacant Property
If you own a building that is vacant or minimally occupied, you may not be aware that your commercial property owner’s insurance coverage is significantly reduced or no longer in effect. The standard coverage form for this type of building states the following:
- A building is vacant unless at least 31 percent of its square footage is rented to a lessee or in use by the building owner for the purpose of conducting customary business operations.
- When a building has been vacant for at least 60 days, there is no coverage for vandalism, building glass breakage, water damage, theft or attempted theft. Leaking sprinkler systems may be covered if they were protected from freezing.
- When the building has been vacant for 60 days, coverage for other property damage, such as floods or fire, is reduced by 15%.
Protect Vacant Property with a Few Common-Sense Strategies
If you own a building that is vacant or soon to become vacant, protect yourself from financial loss by implementing a few simple strategies. Risk management experts suggest that you:
- Invest in regularly scheduled maintenance — Hire a property management company to clear the building of any trash and debris, keep sidewalks in good repair and routinely check the integrity of the pipes.
- Keep exterior lights functioning to discourage trespassing and theft.
- Remove any toxic chemicals and combustibles from the site.
- Drain the pipes or keep the heat on in the building during the winter months.
- Keep all fire-detection and alarm systems in working order.
- Hire a security firm to patrol the building site, especially at night.
Additionally, talk to an insurance expert about adding an endorsement to your existing commercial property owner’s insurance policy if the property will be vacant for 60 days or more.
Posted by Floyd Arthur on
Carmoongroup.com