What your property policy will not cover.

There is a gap between what most building owners assume their property insurance does and what the policy actually says. Insurance is built to pay for sudden, accidental loss. It is not built to pay for a building wearing out. The distinction matters most at exactly the wrong moment — when something finally fails after years of being left alone.

The quotes below are from the Insurance Services Office standard forms that most commercial property policies are built on. Your own policy is amended by endorsement and varies by carrier, so read your form and talk to your agent. But this is the starting point almost every commercial property policy is written from.

The exclusions that catch people

The Causes of Loss — Special Form lists what it will not pay for. Four of them describe ordinary building deterioration:

Wear and tear; Rust or other corrosion, decay, deterioration, hidden or latent defect or any quality in property that causes it to damage or destroy itself; Smog; Settling, cracking, shrinking or expansion

ISO CP 10 30 10 12, Causes of Loss — Special Form, B.2.d

That is the roof that finally gives out, the stucco that has been cracking for six years, the trim that rotted, the sealant joints that failed. None of it is a covered cause of loss. It is the owner’s cost.

There is an important fairness point here, and the form makes it: if one of those excluded causes leads to a listed “specified cause of loss” or to building glass breakage, the resulting damage can still be covered. The exclusion is narrower than a first reading suggests. But the deterioration itself is on you.

The fourteen-day rule

This one surprises people the most. A slow leak is not covered once it has been running long enough:

Continuous or repeated seepage or leakage of water, or the presence or condensation of humidity, moisture or vapor, that occurs over a period of 14 days or more.

ISO CP 10 30 10 12, B.2.f

A pipe that bursts is a sudden event. A joint that has been weeping behind a wall since spring is not. The practical consequence is that the leaks which do the most damage — the quiet ones — are often the ones a policy will not answer for. Finding them is worth more than insuring against them.

Faulty maintenance, and neglect

Two more exclusions close the loop. The first covers work done badly or upkeep not done at all:

Faulty, inadequate or defective: … Maintenance; of part or all of any property on or off the described premises.

ISO CP 10 30 10 12, B.3.c

Neglect of an insured to use all reasonable means to save and preserve property from further damage at and after the time of loss.

ISO CP 10 30 10 12, B.2.m

The second is why a board-up matters after a break-in or a storm, and why the standard form separately makes protecting the property a stated duty. We wrote about that here.

The vacancy clause — the one worth knowing before a tenant leaves

This is the provision that catches landlords and property managers off guard, and it is worth reading twice. The Building and Personal Property Coverage Form defines a building as vacant unless at least 31% of its total square footage is rented and in use, or used by the owner. Then:

If the building where loss or damage occurs has been vacant for more than 60 consecutive days before that loss or damage occurs: We will not pay for any loss or damage caused by any of the following even if they are Covered Causes of Loss: Vandalism; Sprinkler leakage, unless you have protected the system against freezing; Building glass breakage; Water damage; Theft; or Attempted theft. … we will reduce the amount we would otherwise pay for the loss or damage by 15%.

ISO CP 00 10 04 02, Loss Condition E.6

An empty commercial building past sixty days loses coverage for vandalism, theft, glass breakage and water damage outright, and takes a fifteen percent reduction on everything else. That is a serious exposure for a space sitting between tenants.

But the same clause contains the way out, in one sentence:

Buildings under construction or renovation are not considered vacant.

ISO CP 00 10 04 02, Loss Condition E.6.a.(2)

A slow, stop-start make-ready is not only lost rent. It can be an uninsured building. Work that is actually underway changes that. It is a genuine reason to get a turnover moving rather than letting it drift.

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