Commercial Insurance-Vacant Buildings

Vacant Commercial BuildingVacancy Provision

In some ways, personal insurance and commercial insurance have common threads.¬† But don’t kid yourself, getting your arms around commercial insurance is a considerable challenge.

Under a commercial property policy, coverage is significantly different for buildings that are vacant for extended periods. Usually, certain types of coverage are completely eliminated during the vacancy. Insurance companies are interested in protecting ongoing businesses and premiums are based upon active occupancy. Continued, full coverage may be provided, but that is only at the insurance company’s discretion. If a vacant risk is accepted, it usually means paying more premium.

Definitions

Before any coverage restrictions can be imposed, the insurance company must define exactly what they mean by vacancy and the definition is affected by the type of occupancy:

Tenant¬†– When the insured is a tenant and the policy covers that insured’s property interest, the definition of building is the unit or suite¬†Business Space for Lease in Lawrenceburg, KY that has been rented or leased to the tenant. That building is considered vacant when it no longer contains enough business personal property to conduct the customary operations of the insured tenant.

Building Owner Or General Lessee РWhen the insured is a building owner or general lessee, building is defined as the entire building. The building is considered vacant UNLESS a specified percentage of the total square footage is rented to a lessee or sub-lessee and used by the lessee or sub-lessee to conduct its customary operations OR is used by the building owner to conduct customary operations.

Buildings Under Construction РBuildings that are under construction or renovation are not considered to be vacant.

Vacancy Provisions

Now that vacancy has been defined, the vacancy condition can be stated. If the building where loss or damage occurs has been vacant (see definition above) for more than 60 consecutive days before the loss:

  • the insurance company will pay NOTHING if the loss was caused by vandalism, sprinkler leakage, glass breakage, water damage, or theft (including damage from attempted theft).
  • the insurance company will reduce any loss amount by 15% if the claim is due to any Covered Cause of Loss not listed above.

Vacancy PermitReturn to TruePoint Home Page

When vacancy does occur, many companies, for an additional premium, will add a provision (sometimes called a Vacancy Permit). This form changes the policy wording so that it provides coverage for the property during specific time periods when the applicable premises are vacant.

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Special Form

TruePoint Insurance we are insuring Kentucky dot comKey Insurance Words and Phrases

August 4, 2018

Special Form (Homeowners Insurance Covered Causes of Loss: Special Form)

The Special Form is the most comprehensive of the three ISO (International Organization for Standardization) forms used by the insurance industry.  The forms are used to define which perils or causes of loss are covered.  Unlike the Basic and Broad Form, the Special Form does not specify the covered causes of loss.  This form actually covers all causes of loss unless they have been specifically excluded.  Generally, the Special Form excludes coverages for the following perils:

  • Earthquake¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬†¬†Return to TruePoint Home Page
  • Flood
  • Neglect
  • Ordinance of Law
  • Power Failure
  • Intentional Acts,
  • War
  • Nuclear Hazard

copyrighted 2015-2018 TruePoint insurance group, llc all rights reserved

copyrighted 2015-2018 TruePoint insurance group, llc all rights reserved

Broad Form

TruePoint Insurance we are insuring Kentucky dot comKey Insurance Words and Phrases

August 4, 2018

Broad Form (Homeowners Insurance Covered Causes of Loss: Broad Form)

The Broad Form is one of three ISO (International Organization for Standardization) use by the insurance industry to define which perils or causes of loss are covered.  Generally, the Broad Form covers the perils covered by the Basic Form (see below):

  • Wind, Hail¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬†¬†Return to TruePoint Home Page
  • Lightning
  • Fire
  • Smoke
  • Explosion
  • Sprinkler Leakage
  • Sinkhole Collapse
  • Riot
  • Civil Commotion
  • Collison by Aircraft
  • Collision by Vehicles
  • Vandalism
  • Volcanic Activity

Plus the Following:

Special House
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  • Burglary
  • Falling Objects
  • Weight of Ice and Snow
  • Artificially Generated Electricity
  • Freezing of Plumbing

copyrighted 2015-2018 TruePoint insurance group, llc all rights reserved