Most commercial property owners think the biggest threat to their building is when it’s occupied—tenants, traffic, operations, and all the day-to-day chaos that comes with active use.
But ask anyone in the insurance industry what keeps them up at night, and they’ll tell you:
A vacant building is often more dangerous than a fully occupied one.
And not in the obvious “it’s empty” sense
—but in the slow, quiet, expensive ways that catch owners completely off guard.
Let me tell you a quick story.
A property manager reached out in a panic about one of the commercial buildings under their supervision. The tenant had moved out months earlier. It was understood that it might take some time to get a new tenant in, but insurance was already in place and there wasn’t much thought given to any new risk exposures.
But vacancy has a way of hiding problems until they become impossible to ignore.
That morning, a second-floor water line had burst. Thousands of gallons of water poured through the structure, flooding multiple units and causing a ton of damage.
The estimated damage: nearly $450,000. But the physical destruction wasn’t the worst part.
When the claim was submitted, the insurance carrier denied coverage for water damage. The building had been vacant for more than 60 days. As a result, the policy’s vacancy provision kicked in—leaving the owner financially exposed at the worst possible moment.
It was no longer just a property loss – it had become a financial crisis.
The moment a building goes vacant, its risk profile changes—immediately and dramatically—even if the owner feels nothing has changed.
Vacancy is one of the most misunderstood areas in commercial insurance.
And as this situation proves, doing nothing can end up being the costliest decision of all.
Add in that if you own, manage, or broker commercial space in the Mid-Atlantic, you’re feeling the pressure: rising vacancies in certain sectors, longer lease-up timelines, and more buildings sitting idle between tenants.
The good news?
You can absolutely protect yourself—if you know what to do.
From here – I’m breaking down this information is specific detail. But I also realize you might just want me to cut to the chase. If tenants move out (even if there are other tenants still in the building), call your insurance broker.
We’ve also developed a check list that building owners, property managers, and commercial brokers should find handy.
Now, if you want all the details, I’ll break down the best practices below:
1. Notify Your Insurance Broker Immediately (Not After 60 Days)
Vacancy clauses are buried deep in every commercial property policy.
Here’s the simple version:
In MOST cases, when a building is more than 31% vacant, the carrier considers it “vacant” and dramatically limits what they’ll pay for certain losses (your policy may be different!).
Most policies:
- Exclude water damage, vandalism, and theft
- Reduce claim payouts
- Require immediate steps to secure and maintain the property
If you wait too long to tell your broker?
You accidentally set the stage for denied claims.
Pro tip: Even if you think it will only be vacant a few weeks, tell your broker anyway. The fastest way to avoid coverage disputes is transparency.
2. Switch to a Vacant-Building Insurance Program
Vacant properties don’t belong on a standard commercial policy.
Carriers know these buildings face higher risks from:
- Break-ins
- Copper theft
- Squatters
- Water damage
- Fire from vandalism
- Mold growth
- HVAC failure
- Burst pipes
- Roof leaks that go unnoticed
Vacant-building insurance is designed for this.
These programs can often include:
- Vandalism
- Theft (can be harder to come by)
- Water damage (if specific precautions are taken)
- Liability coverage for visitors, contractors, or trespassers
- Options for builder’s risk insurance if renovations are coming
Not all brokers work with the right markets. At Stillwell Risk Partners, we place these with carriers who specialize in protecting vacant and hard-to-place properties—often on more comprehensive coverage forms than most carriers offer.
3. Treat the Building as If It Were an Active Jobsite
Once vacant, you need a maintenance and security plan that shows underwriters you’re in control.
Some best practices to consider include:
Security
- Install motion-activated lights
- Add temporary cameras or live-feed security
- Lock all utility rooms
- Seal mail slots and unused doors
- Maintain exterior lighting
- Keep parking lots plowed and grass cut
- Use anti-copper-theft measures (underwriters love this)
Maintenance
- Winterize plumbing
- Shut off water at the main (whenever possible)
- Maintain heat at required minimum levels
- Inspect the property weekly
- Log inspections in a simple property check form
- Document photos each visit
This protects the building and makes the insurance carrier more comfortable offering the coverage you want.
4. Prepare for a “Longer Than Expected” Vacancy Cycle
The Mid-Atlantic is experiencing uneven vacancy trends:
- Office buildings (especially older ones) are taking longer to re-lease.
- Industrial and retail are healthier—but not immune.
- New construction is delivering empty in some submarkets.
The worst mistake owners make is assuming the space will be full again in 45 days
and keeping their insurance on autopilot.
If your building could go vacant for 3 to 18 months, plan your insurance the same way.
5. Don’t Forget Liability—Vacant Doesn’t Mean “No Exposure”
A vacant building still attracts:
- Contractors
- Vendors
- Realtors
- Inspectors
- Trespassers
- Curious local kids
If someone gets hurt on the property—even if they weren’t supposed to be there—the owner is still the one who gets sued.
Vacant-building liability coverage protects against:
- Slip-and-falls
- Structural hazards
- Poor lighting
- Premises defects
- Injuries to trespassers (yes, really)
6. Document Everything—It’s the Fastest Way to Win a Claim
Underwriters don’t expect vacant buildings to be perfect.
They do expect:
- Clear documentation
- A maintenance schedule
- Photos
- A plan to reduce risk
- Proof of inspections
- Winterization records
When a claim happens, the owner who can show “Here is our process, here are our logs, here are the photos,” gets paid faster and with fewer headaches.
7. Bring Your Broker in Early (Not at the Last Minute)
Vacant properties are extremely context-dependent.
How long will it be empty?
Is renovation planned?
Is demolition likely?
Is it for sale or lease-up?
Is it partially vacant?
Are there adjacent tenants?
Every answer changes the insurance strategy. And if you’re late in getting the insurance in place, you’re likely to pay more for it.
Your broker should be part of the plan from the moment the tenant hands over the keys.
At Stillwell Risk Partners, we always position the building’s story to the underwriter before we place coverage. That single step reduces surprises—and often lowers the premium.
Final Thought: A Vacant Building Doesn’t Have to Be a Liability
But it will become one if it’s not treated with the right level of attention.
As soon as a building goes dark, the rules change.
Your exposure changes.
Your insurance needs change.
Most losses in vacant buildings aren’t caused by big disasters. They come from small failures that go undetected until it’s too late.
If you manage or own commercial property, the smartest thing you can do right now is simple:
If you currently have a vacant or soon-to-be-vacant building, contact me today.
Let’s get ahead of the risk, protect the property, and make sure your insurance actually works when you need it.