Woodbury, NY, April 2, 2020 — In response to the spread of the coronavirus (COVID-19) across the United States, Federal, State and local authorities have issued many emergency orders over the past several weeks, substantially curtailing use and occupancy of commercial and residential properties. These orders and other related circumstances may have an impact on your insurance coverage.
Background: Vacancy/Occupancy/Maintenance Policy Clauses
Most Homeowners and Commercial Property policies include provisions that exclude or limit coverage once a building becomes vacant or unoccupied. A home is generally considered vacant if it is substantially empty of personal property necessary to sustain normal occupancy for a period of 30 days or more. A commercial building is usually considered vacant when 70% or more of the building’s square footage is not used for customary business purposes for more than 60 days.
A home or commercial building left vacant can, depending upon policy terms, trigger exclusions or limitations on insurance coverage for certain perils, e.g., vandalism, building glass breakage, water damage, sprinkler leakage, theft or attempted theft. Different policies can, of course, contain varying definitions of vacancy or occupancy.
Regular maintenance of the covered property is also ordinarily the responsibility of the policyholder and a potential condition to coverage.
COVID-19 and Vacancy/Occupancy/Property Maintenance: What SterlingRisk is Doing
Restrictions on use of property related to COVID-19 might render a property vacant or unoccupied within the meaning of a policy. These restrictions could also prevent regular maintenance. We are in close contact with insurers, industry trade groups and regulators on this important issue. We are exploring whether carriers will waive vacancy clauses or otherwise respond to changes in status based on the COVID-19 pandemic. To date, Carriers are not issuing any blanket waivers. Of course, we will continue to update you on these discussions.
COVID-19 and Vacancy/Occupancy/Property Maintenance: What You Should Do
If you have questions about COVID-19-related vacancy, occupancy or maintenance of your property, please contact your SterlingRisk Account Executive. We otherwise recommend continued property maintenance, which we understand is extremely challenging in these unique circumstances.
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Questions concerning insurance and COVID-19 are complex and challenging. We at SterlingRisk are tracking all related developments. For additional resources, tools, information and links, please contact your Account Executive or visit our Coronavirus (COVID-19) Preparedness page: https://www.sterlingrisk.com/coronavirus-preparedness/.
DISCLAIMER: The materials provided are for general informational purposes only. Your specific insurance policy and individual loss circumstances will determine coverage. Please consult your SterlingRisk Account Executive concerning any policy questions you may have.
