Our insured owns a large free standing office/warehouse building. The tenant vacated the property in July 2012. The insured's property form contains vacancy clause conditions.  A theft of copper wiring took place, and the carrier invoked the “vacant for more than sixty consecutive days” clause to deny the coverage, stating that the building lacked sufficient business personal property to conduct customary operations.

The insured contended that the office portion of the building contains enough business personal property to conduct customary operations of an office and represents more than 31 percent of the total square footage. The insured's position is that the customary operation of the risk is now a furnished office building and warehouse for lease. 

The second issue is there is no record of when the loss occurred—it may very well have taken place within the required sixty-day period. The loss was recently discovered by a real estate broker showing the property. 

California Subscriber

Whether the office contained enough business personal property to conduct customary operations could be a question of fact. It seems that having the property furnished as an office building/warehouse for lease would not be considered customary operations. It is just a building with no operations waiting for a tenant, as the building owner's intent likely would not be to maintain unrented buildings as its customary operations.

The insured would need to show that the building was not vacant for more than sixty days when the loss occurred. This may be difficult to do, but if the loss was just recently reported, and the tenant vacated the property in July 2012, it seems reasonable to assume that the theft occurred when no one was using the building and there was no one on site to report it. It could have occurred within sixty days after the tenant vacated, but the insured would have to prove that. It would be difficult to show that the theft occurred within the sixty-day window if someone was not regularly checking in on the building.