Closed for business? Here is some information about unoccupied property…
Coverage 101. You may have just shut down your operations due to a government mandated closure. Your employees may be working remotely. Or you may be preparing to close some or all of your operations in the near future.
Just because your business is closed to the public does not mean that the commercial risk exposures your operations face are materially less.
If your company moves operations between provinces or cities, one or more of your locations may be unoccupied for either a short or extended period of time. As your business needs evolve, so may your property insurance requirements.
Vacant property coverage may also be a viable option if your business is in the process of:
- Selling the property,
- Filing for bankruptcy, or
- If the property is under construction and/or not suitable for a use.
We have prepared this post for people who are asking us questions about vacant property insurance Canada.
4 days unoccupied? You have a vacant property…
There are many reasons why your bricks and mortar business may be closed. If one or more of your locations is or may be unoccupied for a short or extended period of time, this information is for you.
According to the International Risk Management Institute (IRMI),
“A vacant building contains little or no furniture or other personal property. Even if it is not vacant, a building is unoccupied when people are absent.”1Source: 1 IRMI
Unoccupied property can pose a serious risk to your bottom line because vacant properties are more susceptible to vandalism, undetected repairs, fire and other losses.
A vacancy of as few as 4 days (96 hours) may be sufficient for your property to be considered unoccupied. Insurance companies in Canada specifically state the amount of time that an insured property is considered to be unoccupied in your insurance policy.
How vacant property insurance Canada fills a critical gap
Vacancy can cause a coverage gap. In fact, “vacant home insurance Canada” is one of the top insurance topics that people are searching for on Google.
Therefore, it is important to understand why and what insurance coverage options are available for your business.
Your existing commercial property insurance may exclude coverage because of the vacancy. In addition, the International Risk Management Institute (IRMI) provides the following insights:
“Vacancy Provision — property insurance policy provision found in most commercial property policies that severely restricts coverage in connection with buildings that have been vacant for a specified number of days (typically, 60 days). Some forms also restrict coverage in connection with buildings that have been unoccupied for a specified number of days.2Source: 2 IRMI
101: Vacant property risks
Vacant or unoccupied property insurance coverage is designed to fill an important gap. Vacant property insurance covers common risks for unoccupied property such as:
- Lightning, windstorm or hail damage
- Sprinkler leakage
- Malicious mischief on the insured property and general property destruction
- Presence of squatters on the insured property causing damage without owner’s knowledge
If your property is vacant or soon-to-be unoccupied, there are options
There are multiple reasons why your property may be unoccupied by people for a short and long periods of time. An ALIGNED Advocate can help you find coverage that will suit the needs of your business operations.
Here’s what to know about vacant property insurance Canada options.
Specifically, here’s how unoccupied property coverage helps
Under certain policies, what’s referred to as vacant or unoccupied property insurance can provide protection if your building is unoccupied for as few as four days.
Vacant property insurance also protects against liabilities in the event that someone is injured on your unoccupied property and sues for damages.
Due to the increased risks associated with owning an unoccupied or vacant building, a typical vacant property policy is one and a half to three times the cost of regular property insurance coverage.
While unfavourable incidents may occur, vacant or unoccupied property insurance coverage can offer necessary protection for your assets.
101: Vacant property risk management
In addition to vacant property coverage, you can proactively manage risks. Ways to manage unoccupied property exposures include:
- Sealing off windows and doors
- Removing valuable inventory and/or goods
- Hiring a contractor to erect temporary fencing
- Installing alarm systems that are triggered by intruders, fires or floods
- Regularly inspecting your unoccupied for damage or threats of damage
- Hiring third party security to monitor and/or regularly physically visit and inspect the building
About us | ALIGNED Insurance brokers
We are proud to support businesses across Canada. In addition to a national operations centre in Cambridge, Ontario, we have offices in Toronto, Ontario; Calgary, Alberta and Vancouver, BC.
We are 100% Canadian owned. And we’re proud to be a premiere insurance brokerage that currently serves more than 1,600 clients across this country. First and foremost, we believe that aligning insurance experts to business needs is one of the most important things an insurance broker can do to support their clients.