Vacancy/Occupancy Clauses in Property Insurance

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...was not entitled to summary judgment 3 on this ground. This case was settled prior to depositions for $55,000.


Admittedly, there are cases when a court will rule in favor of an insured with a protective safeguard device or service that was inoperable, where extenuating circumstances exist. But such cases appear to be rare. This should be a warning to commercial insureds as well as to agents and brokers, that they need to understand — and the latter needs to explain — the implications of this endorsement if the safeguards device is not installed or is inoperable at the time of loss.

Insureds should keep detailed records concerning when and how safeguard devices have been serviced and maintained. Being able to demonstrate a consistent maintenance schedule for such devices, while not a guarantee that the insured will prevail should a safeguard device fail or become impaired, may at least reduce the risk that a loss will occur.


Robert J. Prahl, CPCU

Robert Prahl has more than 30 years of experience in the insurance business, primarily in claims and claims training. He began his career as an adjuster in the New York metropolitan area and eventually became a claims manager and claims training director. He has written extensively on insurance issues, having authored two text books for the Insurance Institute of America and previously served as a columnist for Rough Notes magazine, an insurance trade publication.



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Ronald A. Cuccaro, SPPA


Sheila E. Salvatore

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