The Critical Impact of Vacancy Clauses on California’s Commercial Property Insurance in 2024

In 2024, commercial property owners in California must be vigilant about the vacancy clause in their insurance policies. This clause is a critical aspect to consider when properties remain vacant for extended periods. Under most commercial property insurance policies, if less than 31% of the total square footage of a building is in use, the property is deemed vacant. Once a property is vacant for more than 60 days, significant coverage restrictions kick in, potentially leaving property owners exposed to a host of risks, including theft, vandalism, and water damage.

The Impact of the Vacancy Clause

Commercial properties that remain vacant for over 60 days are subject to severe limitations in coverage. For instance, damages caused by vandalism, water, theft, or attempted theft are not covered beyond this period. Moreover, the payable amount for claims related to fire, flooding, or earthquakes may be reduced drastically.

Strategies for Managing the Risks of Vacancy

  • Regular Property Checks: Conduct regular inspections and maintenance to minimize risks and potential damages.
  • Vacancy Permit Endorsement: Adding a Vacancy Permit Endorsement to your policy can reinstate coverage for losses due to theft, natural disasters, and other damages during periods of vacancy.
  • Security Enhancements: Boost security measures, such as installing alarm systems or surveillance cameras, to protect the property while vacant.

Why the Clause Exists and How to Navigate It

Vacancy clauses are included in insurance policies to address the heightened risks associated with unoccupied properties, such as increased susceptibility to vandalism, fire, and water damage due to lack of regular maintenance and immediate response to incidents. Knowing the details of your policy’s vacancy clause is crucial. Communicating with your insurance provider and adjusting your coverage to suit extended vacancy periods is essential.


Please note that policy terms, including vacancy clauses, can vary. The information provided here is based on general insights and may not specifically apply to all California commercial property insurance policies. Always consult with your insurance provider for accurate and detailed information regarding your policy.

Proactive Management of Vacant Properties in California

Commercial property owners in California in 2024 must proactively manage the risks associated with vacant properties. Understanding the implications of the vacancy clause, enhancing security measures, and adapting insurance coverage are key to protecting your investment. With careful planning and strategic actions, you can effectively mitigate these risks and ensure your property remains adequately protected.


  • What does a property being ‘vacant’ mean under most insurance policies?
    • A property is typically considered vacant if less than 31% of its total square footage is utilized for normal operations or rented out.
  • What are the risks of not addressing the vacancy clause?
    • Ignoring the vacancy clause can result in significant coverage limitations for damages such as theft, vandalism, and water damage.
  • Is it possible to get coverage for a vacant property?
    • Yes, by adding endorsements like a Vacancy Permit to your policy, you can secure coverage for specific risks associated with vacant properties.

Connect with Olympic Insurance – Your Trusted Advisor Since 1947

Are you grappling with the challenges posed by the vacancy clause in your commercial property insurance? Olympic Insurance, with its rich heritage since 1947, is here to assist you. Our team offers customized solutions to navigate the complexities of insurance policies and secure your investments. For a comprehensive review of your insurance needs and expert advice, contact Olympic Insurance today. Benefit from our decades of expertise to find the right coverage for your property.

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