Steps to Protecting Vacant Commercial Property

In today’s economy, commercial property vacancies continue to rise, creating special mitigation challenges for business owners and landlords. Office exposures are the hardest hit by the economic climate at the moment with retail, industrial, multi-family residential, and farms not far behind. While each of these occupancy categories has its own unique risks, many IBHS members have asked for general tips to help policyholders take measures to reduce the hazards posed by vacant property, and to make sure that proper physical and financial protection is in place.

  • Advise public sector emergency response organizations (fire, police, etc.) that your building is unoccupied, and provide them with your keys and contact information in the event of an emergency.
  • Leave essential utilities turned on (see notations below in the maintenance section for determination as to whether you may want to leave on or shut off all or some of the utilities), and advise utility companies of the vacancy. Ask to be notified in the event of high usage or an emergency.
  • Advise your premises alarm company of the vacancy, create new codes and update contact information. Consider hiring a patrol service or have someone inspect the premises at different times of the day every day to note any changes.
  • Install exterior and interior motion or timed lighting, to diffuse potential animal infestation and criminal activity, and to give the appearance of occupancy.
  • Change the locks and/or install new tapered deadbolts since copies of the existing keys may have been given to prior tenants or others. Tapered deadbolts make it almost impossible to use a wrench to twist the lock open.
  • Consider allowing an organization (public, private or nonprofit) to occupy your property at no charge, if they are willing to maintain the property and provide appropriate insurance coverage for you as the building owner, naming you as an additional insured in the event of a loss.
  • Talk with other building owners and rental agents to determine successful approaches to find good tenants.
  • Take steps to make the property appear occupied to reduce the risks of vandalism and other crimes occurring there. Maintain the exterior by mowing lawns, taking care of shrubbery, removing leaves or snow, clearing driveways and walkways.
  • Suspend mail and delivery services to the building –notify postal delivery companies and the U.S. Post Office that nothing should be delivered to the property.
  • Remove hazardous materials from the property, such as pollutants, chemicals or combustible materials to prevent explosion, leaks, seepage or contamination.



  • Adjust the Thermostat.
    • In colder climates, adjust the temperature to 55 degrees. This will keep the pipes from freezing.
    • In warmer climates, adjust the air conditioning to 85 degrees to protect against humidity and potential mold exposure.
  • Plan for Rain, Hail and High Winds.
  • Trim dead vegetation around the building.



  • Protect Plumbing
    • Unless the building has a fire protection sprinkler system, shut off the water and drain the water lines.
    • Shut off the gas to the water heater, or turn the temperature control to a very low or “vacation” setting.
    • If the building has a water softener, shut off the supply line. Unplug or turn off any non-essential appliances, boilers or machinery.
  • Protect Active Water
    • If you choose not to shut off the water, inspect for leaks and turn off the water supply to individual fixtures.
    • Unplug appliances and ensure any sump pumps are working properly.
    • Insulate pipes in colder climates.
    • Consider installation of an electronic leak detection system, either local or monitored.
  • Prevent Leaks
    • Check the roof for loose or missing shingles or needed repairs.
    • Make sure gutters are cleaned out, downspouts extend away from the foundation, and splash blocks slope away from the building.
    • Caulk seams and cracks
      • around all pipes where they exit roofs and exterior walls,
      • flashing seams between the roof and siding,
      • door and window frames, and
      • any vents or antennae.

Vacant commercial buildings may cost more to insure than occupied commercial buildings because they often have more exposure to losses.

  • If your building is in a flood plain or located on the coast, a flood insurance policy may be needed. If you live in an earthquake-prone area, a separate policy would also be required.
  • A commercial building in a dense, wildfire area may also cost more to insure.
  • Check with your insurance agent or company to determine how vacancy in your commercial building will affect your property policy.

While the commercial real estate market is expected to begin recovering next year, occupancy increases will vary by the type of building and location. The relative lack of new construction means there is little new commercial inventory coming on line, which may make it easier to rent existing properties. In the interim, it is prudent to protect your current investment by identifying and addressing the hazards resulting from commercial vacancy.



Pubished June 2009