Maybe you have a tenant who moves out of the third floor of your Bay Area building with nobody to replace them. Or you’re downsizing your company and deliberately leaving part of the building empty.
A space can be in perfect condition and your insurance company still treats it differently if it’s unoccupied. Commercial insurance can help with filling that gap.
What "Vacant" Actually Means in Your Policy
The definition of the word "vacant" is very specific on CA insurance forms. Your insurance company may consider your building vacant when less than 31% of the square footage is being rented or used for regular business.
If you’re leasing the space, your insurer may take into consideration how much furniture and other business property is still inside.
The 60-Day Clock No One Is Watching
Once a building has been vacant for 60 consecutive days, a standard policy for commercial property may no longer cover some losses. Things like vandalism, theft, water damage, sprinkler leaks.
You can also see coverage reduced if you have other losses. It’s a problem that can turn serious quick if a pipe bursts and no one notices it for several days.
How Commercial Insurance Covers Your Unused Spaces
A vacancy permit endorsement can help you keep some coverages in place. You have to arrange it before you reach the point where your policy starts to impose limits on your coverage.
At Wai Cheng Insurance Inc., we recommend that clients call as soon as they get notice from a tenant. Don’t wait until a space has already been empty for 60 days.
Go Over Your Floor Plan with an Expert in CA Commercial Insurance
The Bay Area building you described when you renewed your commercial insurance policy may not be the same building you’re working with now. Get in touch with Wai Cheng Insurance Inc. and we’ll go over your commercial insurance with you to make sure you have the coverage you think you have.
