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The Big Empty: Key Coverage Concerns and Trends for Vacant Buildings

The vacant building business is still alive but waning in some areas of the country, as carriers are starting to count their losses and pull out.

By Bonnie Cavanaugh, E&S Editor | Updated on August 27, 2012
For agents and brokers looking to break into the Vacant Buildings market category, or to expand their existing book of business, here’s a look at the latest trends and key coverage needs.

UNIQUE EXPOSURES DRIVE (USUALLY) HIGHER RATES

Commercial property owners often (but not always) face increased insurance rates when their building is considered “vacant,” a categorization that comes, depending on the specific terms of the policy, when occupancy falls below a certain threshold—typically when only 25-31 percent of the square footage is occupied.

A standard ISO Property policy states that if a building is vacant for more than 60 days, there are certain limitations of coverage that kick in, and specific perils are eliminated: vandalism; theft (including damage from attempted theft); sprinkler leakage; glass breakage; and water damage from bursting pipes.

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