Myth No. 1: Ghost malls exist only in economically depressed regions.

Although pockets on the East Coast, Midwest and West Coast see the most closings, ghost malls are a national issue and part of the larger trend of vacant property, Bull says.

Although “Type A” malls–the “best of the best”—are not typical candidates for becoming ghost malls, the lower tier of “economy malls” can be vulnerable when real estate investors no longer find them attractive investment targets, he says.

Bull, who spent 15 years in Chicago as a retailer broker specializing in property placement for clients like General Growth Properties, is intimately familiar with the challenges of insuring vacant property for clients until that property is renovated or sold for other use.

Myth No. 2: Insurers don't want to write coverage for ghost malls.

Although this is true for the admitted market, which “doesn't like the risk,” there are plenty of players in the E&S space that are hungry for ghost malls and vacant property in general, Bull says. At last count, he noted more than 25 E&S insurers, including Lloyds of London syndicates, that are actively writing the coverage, with an average property capacity for vacant buildings of between $50 million and $100 million based on marketplace averages, he says.

Because all vacant commercial properties are unique—malls differ from schools or warehouses–manuscript property policies are typically used for these exposures rather than ISO forms, he says.

Premiums are based on a variety of elements such as square footage, type and quality of construction, security, the length of time spent vacant, whether the mall is locked or boarded, condition of the sprinkler system, and whether utilities remain operative. Geographical risks also affect pricing, such as whether the mall is built on a landfill, or is in an earthquake or tornado zone. Information is then downloaded into Risk Management Solutions modeling for pricing. On average for fire coverage alone, Bull is seeing a price range of a minimum of 50 cents per $1,000 premium. Price negotiations begin after modeling is complete.

Myth No. 3: The biggest risk in covering ghost malls is arson.

Although fire (whether accidental or arson) is the first threat that comes to mind with vacant property, deserted malls open up a whole new can of risk because of the sheer size involved. Boarded-up properties with huge square footage naturally attract vandals and the homeless, so vandalism and malicious mischief are among the exposures, Bull says.

Geographically specific risks, such as earthquake in California, can add another level of risk to a ghost mall or other vacant property, increasing both risk and rates, Bull says. Ghost malls in the Midwest were at major risk for freezing pipes and water damage during last winter's deep freeze; and adjacent properties could also have an impact on risk.

To help mitigate risk, vacant property owners are required to have all utilities operational and retain 24-hour paid private security to deter squatters and vandals, Bull says.

Myth No. 4: Most ghost malls are huge.

Before it was demolished in 2012, the massive Dixie Square Mall in Harvey, Ill., best known for location filming of “The Blues Brothers,” was one of the most infamous ghost malls in the country. But ghost malls can range from huge locations like this to strip malls, and in many cases, the mall doesn't become completely deserted, but instead has closed stores or sections, Bull says. “I've been in malls where there is just a closed sign in some areas, and other attraction properties remain in the mall,” he says. “They shut down sections and hope the economy rebounds so they can lease out the space to other operations.”

Myth No. 5: All ghost malls are derelict properties.

Although everyone has seen gruesome photo essays of deserted malls covered with graffiti and rife with trees and weeds growing everywhere (as in the urban decay photograph of photojournalist and activist ”Seph Lawless“), it's not in a property owner's best interest to let vacant property get to that extreme, Bull says. To attract potential investors, owners must maintain general upkeep of the property to keep it attractive—and, in cases where retailers still operate in part of the mall, to make it a place where people feel comfortable and secure.

Special thanks to photojournalist Seph Lawless (WWW.SEPHLAWLESS.COM), author of “Black Friday.” Learn more on his Facebook page (WWW.FACEBOOK.COM/SEPH.LAWLESS).

Dead Mall Dictionary (source: DeadMalls.com)

Dead mall: a mall with a high vacancy rate (70% or less occupancy), low consumer traffic level, or is dated or deteriorating in some manner.

Anchor: A large store in a shopping center, usually highly visible and a destination for shoppers. Anchors help draw consumer traffic to a mall.

Redevelopment: To change the architecture, layout, décor or other components of a shopping center to attract more renters and profits. Redevelopment could be either remodeling an existing mall or repurposing it from retail space to office or educational usage.

Labelscar: Fading or dirt left behind from a sign on or in a mall. Labelscars leave a readable marking, which is very helpful when identifying former stores. (The term “labelscar” was brought to the forefront by Peter Blackbird in 1998 and is now widely used to describe this phenomenon)

Sealed: When a mall is locked up, and closed to the public

Shuttered: When a mall is boarded up.

Enclosed: A mall with a common space or non-retail area that is part of the structure, which joins the stores. Usually the space is climate controlled, and has places for kiosks.

Open Air: A shopping center in which stores are only accessible via exterior entrances.

Greyfields: Malls where annual sales per square foot is less than $150, or one-third the rate of sales at a successful mall (coined by PwC and the Center for New Urbanism after the term “brownfields” for old industrial sites).

First-Class Mall: Regular operating mall.

Second-Class Mall: High vacancy, or non-traditional store occupancy

Third-Class Mall: Areas of entire mall sealed to the public.

Fourth-Class Mall: Shuttered or slated for demolition

Fifth-Class Mall: Redevelopment has begun or is completed.