Hi, this is Alyssa Burley with Ranchemace's Media Communications and Client Services Department. Thank you for listening to today's top Ranchemace news brought to you by our Safety and Risk Management Network Studio One. Welcome back everyone. It's now May and our team continues to provide relevant research to our clients about how this COVID-19 pandemic will affect their business moving forward.
Daniel Phraisey, our Executive Vice President at Ranchemace, wrote an article titled, COVID-19 Business Shutdown. What coverage gaps exist with vacant property? Daniel, thank you for joining us. Thank you Alyssa.
Can you tell our listeners more about the coverage gaps that exist if they have vacant property? In response to the COVID-19 pandemic and ensuing shelter-in-place restrictions, many non-essential businesses have been shuttered for several weeks. As those businesses deal with the massive revenue and employee losses, building owners must be cautioned to review their property policies closely for vacancy, provisions, and exclusions. Vacancy clauses can create exceptions from coverage if the property in question is vacated or unoccupied for a defined period of time, most often 60 days but often shorter.
For example, there are some policies that will not provide coverage if a property sits vacant more than that fixed number of days, but applies to only certain types of losses like vandalism, theft, or water damage. Additional limitations can include a reduction of losses by 15% or more for more typical covered causes of loss, like a building fire, and certain losses can be excluded altogether once the property is vacated, depending on the insurance company's form. Finally, there are still other policies that will, in fact, provide coverage for any types of losses, but stipulate that the policy holder must inform them that the property has been vacated. What qualifies as vacant or unoccupied?
Some policies define these very specifically, while others are broad and ambiguous, offering little comfort at the time of loss. Rather than wait until after a loss when coverage might still be in jeopardy, take the initiative now to contact your broker if your property is vacant or partially occupied as a result of the COVID-19 pandemic. Communicating with the insurance company will help clarify definitions and interpretations and allow you to plan appropriately for the potential of a property loss. While this continues to be an unprecedented time, several insurance companies are now sending notices to policy holders that they will not consider a building to be vacant for the days during any period of occupancy that changed as a result of the government's day-at-home order or similar directive to COVID-19.
Take time now to review your policies with your broker, learn more about your specific vacancy provision, and whether your insurance carrier will waive some or all of this provision during this window of time. Subscribe to our weekly newsletter and podcast to stay informed about what's happening in the insurance industry during this pandemic. This is Alyssa Burley with Rancia Mesa. Thanks for tuning in to our latest episode produced by Studio One.
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