An existing office building being renovated for a multi-use project. (Photo: J. Albert Diaz) An existing office building being renovated for a multi-use project. (Photo: J. Albert Diaz)

Every claim is different, and some insurance policies can be difficult to interpret for unique situations. FC&S Expert Coverage Interpretation, the recognized authority on insurance coverage interpretation and analysis for the P&C industry, makes it simple to find credible answers to your complicated coverage questions. Analysis brought to you by our FC&S experts. 

Editor’s Note: When an insured purchases a new building with plans to use it as a different occupancy than it was built for, it is often a lengthy and complicated renovation process that takes months if not years to complete. The renovation process can create a situation rife for theft, especially when you add COVID-19 shutdowns, unemployment, and an unused building to the mix. However, the commercial property policy vacancy clause can complicate when and if coverage applies during periods of renovation.

Question: The insured purchased a 50,000 square foot building in October 2019 with plans to use the space for his agency that services the developmentally disabled. From the time of purchase, the insured cleaned the building, used the space for meetings, and moved in BPP. During this time, the electric and gas were on, but the building was winterized, and water/sewer was shut off. The insured was also obtaining quotes for renovation work.

Upon COVID-19, Ohio shut down many businesses, including his, in March 2020. On April 28, still during the shutdown, the insured noticed that theft of property had taken place at his building. He notified his insurance company and filed a claim. 

The insurance company has not made a final decision yet but is pointing to a vacancy clause in the insured’s policy. My questions are: 

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