Vacancy Clause

Vacancy provisions reduce or eliminate certain coverages — vandalism, sprinkler leakage, glass breakage, theft, and water damage are common targets — after a building has been vacant for a threshold period, often 30 or 60 days. The definition of vacant vs. unoccupied varies by policy.

Commercial building owners and landlords must notify carriers or obtain vacancy permits when tenants leave. Failure to do so can leave a loss uncovered even though premiums were paid.

A retail space sits empty for 45 days after a lease ends; vandals break in and start a fire. The vacancy clause may exclude vandalism and arson-related damage unless a vacancy endorsement was purchased.

Insureds confuse unoccupied (furnished but no people) with vacant (empty of people and property per policy definition). Assuming a relative checking the house prevents vacancy status is often wrong.