If a building insured with commercial property insurance has been vacant for 90 days, which statement is true?

When a building insured with commercial property insurance has been vacant for 90 days, the terms of many insurance policies typically include a provision that modifies the coverage due to the vacancy. Specifically, the reduction in payment for unnamed perils—those perils not specifically named in the policy—could indeed be reduced. This reduction is often by a specific percentage, such as 25%, reflecting the increased risk associated with vacancies.

An extended vacancy can lead to potential issues like deterioration or vandalism which insurers see as increasing the likelihood of loss. Therefore, it is standard for insurance policies to stipulate that if a property is vacant for an extended period, the coverage becomes less favorable for the policyholder, leading to the correct choice indicating a 25% reduction in benefits.

Understanding this provision is crucial for anyone working in property insurance as it emphasizes the importance of maintaining occupancy in a commercial property and being aware of policy specifics related to vacancy clauses.