Two words appear in property policies that most owners read straight past, and they are not interchangeable. Which one describes your building on the day of a loss can decide whether the claim is paid.
Unoccupied generally means nobody is living or working there, but the contents are still in place. The furniture is there, the stock is there, the place looks lived in and someone is expected back.
Vacant generally means empty of people and of property. Nothing in it, nobody in it, no operations running.
The restrictive wording almost always attaches to vacancy, not to unoccupancy. A furnished flat between tenants and a stripped-out unit awaiting a fit-out are not treated the same, even though both are empty of people.
An empty building is a worse risk in a way that is easy to underestimate. Nobody hears the pipe. Nobody smells the smoke. Nobody notices the back door has been forced. Small problems get weeks to become large ones, and buildings with nothing in them attract attention of the wrong kind.
Once a building has been vacant beyond the period named in your policy — commonly around 60 days — forms typically suspend vandalism, glass breakage, water damage, sprinkler leakage and theft, and reduce what they pay on remaining covered losses by a set percentage. The clock is usually counted in consecutive days immediately before the loss.
The paragraph above says "generally" and "commonly" for a reason. Different forms define these terms differently, and a commercial building can be treated as vacant when a set share of the floor area is not being used for customary operations, even while another tenant is trading. That is a genuine trap for a multi-unit owner who believes an occupied building cannot be a vacant one. Send us the policy and we will read the definition to you.
Tell us before the building empties, not after something happens. A vacancy permit endorsement can restore the suspended coverages, but it has to be in place beforehand — there is no retrospective version. Keep the heat on or drain the system over winter. Have somebody physically walk the property on a schedule and write down when they did.
Renovations catch people out most of all: the tenant leaves, the contents go, the work runs longer than planned, and the building quietly crosses from unoccupied into vacant while nobody is counting. See our landlord insurance page.
Tell us the dates and what is being removed. A vacancy permit endorsement has to be in place beforehand — there is no retrospective version.
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