Most owners of a quiet commercial building assume they are covered because they are still using it. A 2025 Ohio appellate decision is a short, clear illustration that use and occupancy are not the same word in a property policy, and that a building being actively used for something can still be vacant for the purpose that matters.
The Case
In Rick and Charles Investments, LLC v. Liberty Mutual Group, Inc., 2025-Ohio-1035, the Court of Appeals for the First Appellate District of Ohio, Hamilton County, decided an appeal from a grant of summary judgment to the insurer on a denied property claim. The property was insured for occupancy under the category "Churches and Synagogues," and the commercial general liability declarations classified it under "Churches Or Other Houses Of Worship" and "Buildings Or Premises - Bank Or Office - Mercantile Or Manufacturing (Lessor's Risk Only)." The policy carried endorsements specific to religious organisations, including a pastoral-counselling exclusion.
The owner never leased the building to be operated as a church. It was used instead to warehouse materials for rehabilitating other properties the principal owned, and to store inventory for a separate company he owned that manufactured and distributed pop-up tents. Water and electricity to the property were disconnected, on the stated basis that those utilities were not necessary for use as a warehouse.
What the Vacancy Provision Said
The opinion reproduces the provision in relevant part. A building would be considered vacant unless at least 31 percent of its total square footage is "used by the building owner to conduct customary operations." And where a building has been vacant for more than 60 consecutive days before loss or damage occurs, the insurer "will not pay for any of the loss or damage if it was caused by vandalism, sprinkler leakage (unless the sprinkler system was protected against freezing), building glass breakage, water damage, theft, and attempted theft."
Read those two sentences together and the structure becomes clear. The first is a proportional test measured against a particular kind of activity. The second is a waiting period after which a specific list of perils — the ones that overwhelmingly befall empty buildings — stops being covered at all.
Why Being Used Did Not Help
The owner's argument was the intuitive one: the building was in use, by the owner, for storage, and storage occupies square footage. The court's answer turned on the two words that the intuitive reading skips — customary operations. The operations the policy was written against were those of a church. Warehousing rehabilitation materials and tent inventory was not that, whatever proportion of the floor it covered.
The appellate court held that because the property was vacant and had been so for more than 60 consecutive days prior to incurring damage, the vacancy provision excluded coverage, the insurer did not err in denying the claim and did not breach the contract. Summary judgment for the insurer was affirmed, and the bad-faith claim failed alongside it.
What This Means for an Owner or Manager
The practical lesson is not about this policy or this insurer. It is that the question "is this building vacant?" has an answer written down somewhere, the answer is usually proportional and tied to a stated class of use, and almost nobody looks it up until after something has happened.
- The definition lives in your own policy — proportion thresholds and day counts vary between policies and between editions of the same form
- Activity is not the test; the test is use for the operations the policy was written against
- The clock runs on consecutive days before the loss, so a building that has been quiet since a tenant left in the spring may already be past it
- Disconnecting utilities is evidence about how a building is being used, and it cuts against the owner on exactly this question
- A change in how a building is used is a conversation with a broker, not a decision to make alone — a vacancy permit or other endorsement may be available
- What a tenant's departure actually changed should be documented at the time, not reconstructed after a loss
Where Field Documentation Fits, and Where It Does Not
It would be convenient to claim that regular property visits prevent this outcome. They do not. Whether a vacancy provision applies is decided by the policy wording against the facts, and no amount of mowing changes a definition. Anyone selling inspections as a cure for a vacancy clause is selling something the clause does not care about.
What documentation does is supply the facts. Disputes of this kind turn on when a building went quiet, what was happening in it, what condition it was in before the loss, and whether damage was sudden or the end of a long deterioration. Those are evidentiary questions, and an owner with dated photographs and a per-visit record answers them; an owner without one is reconstructing a year from memory against an adjuster with a file. That is a real benefit and a narrower one than the industry usually claims.
Ethreon maintains vacant commercial buildings on a documented cycle: secured, inspected, grounds kept to local code, and every visit closed with dated photographs that establish condition on a date rather than in hindsight. See commercial property maintenance, vacant property maintenance, or check coverage for the county the building sits in.
Contact EthreonRelated Services
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Frequently Asked Questions
1What makes a commercial building 'vacant' for insurance purposes?
It is defined by the policy, and the definition is usually about proportion of use rather than whether anyone is inside. In the Ohio case discussed here, the provision stated that a building would be considered vacant unless at least 31 percent of its total square footage is used by the building owner to conduct customary operations. Definitions vary between policies and between editions of the same form, so the controlling text is the one on your own policy.
2What does the 60-day trigger do?
In the policy before the Ohio court, where a building had been vacant for more than 60 consecutive days before loss or damage occurred, the insurer would not pay for loss or damage caused by vandalism, sprinkler leakage unless the sprinkler system was protected against freezing, building glass breakage, water damage, theft, and attempted theft. Those are, between them, most of what actually happens to an empty building.
3Can a building be in use and still be vacant under the policy?
Yes, and that is the trap the Ohio case illustrates. The owner was using the building — as a warehouse for rehabilitation materials and to store inventory for another company he owned. The court held the property was nonetheless vacant within the provision, because the use was not the customary operations for which the building was insured. Activity in a building is not the test; the policy's test is.
4What was the outcome of the Ohio case?
The First Appellate District affirmed summary judgment for the insurer. Because the property was vacant and had been so for more than 60 consecutive days prior to incurring damage, the vacancy provision excluded coverage, and the insurer did not breach the contract in denying the claim. The insured's bad-faith claim also failed.
5How does an owner avoid this?
Not with field services, which is worth saying plainly — this is a policy question and it is answered before a loss, by reading the vacancy provision on your own declarations and talking to your broker about whether a vacancy permit or other endorsement is appropriate. What field work contributes is evidence: a dated record of the building's condition and of what was being done there, which is the factual half of any later dispute about occupancy and cause.