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Vacant Buildings


Insurance companies take buildings that are vacant very seriously. The experiences with vacant buildings historically have not been good so the rules for these are quite stringent. Examples of a very concerning situation are properties such as a house, barn or office building. Machine sheds or grain bins are not a concern to insurance companies because they are typically empty on a seasonal basis, insurers understand this and it does not change the exposure at all.

You have to notify your insurance company of a building that is vacant immediately. If you do not, it may nullify any coverage on the building. Every insurance company will have different ways of dealing with this situation.  Some insurers put a notice on your policy (vacancy permit) of its vacancy status and every 2 or 3 months you have to confirm this again with them in order to keep coverage in place. If it is forgotten and they are not updated of this fact again you are in jeopardy of having no coverage at all. Some companies will contact you regularly (through your broker) for updates.

The level of coverage changes when a building becomes vacant. Typically, you no longer have replacement cost coverage, building collapse, vandalism coverage or water pipe breakage coverage to name a few.

It is always very important to talk to your insurance broker as soon as possible to allow for the most proactive approach to this situation.Be sure to seek advice and purchase insurance from those who understand your business!