Issue link: http://palletcentral.uberflip.com/i/685770
In the case Mallett v Farm Bureau Ins. Co., the insurance carrier denied all coverage since the rental property was vacant for more than 60 days prior to it being destroyed in a fire. Under the terms of the policy, the property owner was not entitled to insurance benefits because the policy did not offer coverage for properties vacant for over 60 days. In Alexander 1776, LLC v St. Paul Travelers, the insurance company denied coverage for an $800,000 water damage claim from a pipe break since less than 50% of the total square footage of the building was occupied at the time of the loss. You should NEVER have a vacancy clause on any property policy. Conclusion Insurance companies often rely on the fine print of obscure penalty clauses in order to reduce or deny the coverage after a loss. Some insurance companies will waive these clauses if the agent requests it. If the insurance company refuses, the policyholder should consider it an indication of how that carrier will respond to any claim brought under the policy. PC 24 PalletCentral • May-June 2016 palletcentral.com INDUSTRY Dennis P. Bilancia LIC, AAI, AIS, is Vice President/Account Director, Property & Casualty Division at Marsh & McLennan Agency. Dennis focuses on insurance services for the wood packaging industry and recognizes the challenges, and the need for a proactive approach to reducing claims. Dennis can be reached at 734-525-2420 to answer any questions or pro- vide an in-depth review of an existing insurance program. "My company occupies three offices in our building and has placed the remaining nine offices up for rent. Yesterday we discovered that a pipe had broken over the weekend and water leaked through all three floors. Our insurance company refuses to pay the claim since the building was not "sufficiently occupied" at the time of the loss."