Protests and mass demonstrations that can sometimes descend into rioting and civil unrest are becoming more common not just in the U.S., but all over the world. Businesses can sometimes unwittingly become collateral damage from vandalism and looting.
It doesn’t have to be a retail establishment; office buildings and other commercial properties can also face looting and damage during civil unrest. For business owners whose properties are damaged or destroyed, the ordeal can be both unsettling and stressful as they wrestle with the specifics of filing insurance claims.
Fortunately, you don’t need special insurance policies to cover these events. Your basic commercial property policy and commercial auto (if you have business vehicles that are damaged) will usually suffice.
Here’s a look at what your policies may cover and how to prepare for filing a claim if your business is damaged during rioting or civil unrest.
Property damage
Standard commercial property policies cover damage to a business property caused by fire, explosion, riot or civil commotion, vandalism or malicious mischief. This would include coverage to the structure, as well as any inventory, fixtures and other contents. Business owner’s policies also include this risk.
Damage payouts would be subject to sublimits (specific or blanket) for inventory, fixtures and other items, as well as the policy deductible.
Commercial vehicle damage
For business-owned vehicles to be covered for damage for these types of events, you’ll want to ensure that you have purchased comprehensive coverage, which is an optional, but highly recommended part of your policy.
Comprehensive coverage may cover a vehicle if it is:
- Stolen,
- Damaged, or
- Destroyed.
One of the most common damages to vehicles during riots is broken windshields, which you can usually get covered with an optional glass coverage rider.
Business interruption coverage
Companies that are forced to close as a result of rioting and looting damage may have coverage for business interruption under a business property policy.
Business interruption insurance may cover lost income if a company is unable to operate after its premises were damaged during a riot or social unrest. Coverage may also apply if a business suffers a loss of income because of curfews or if authorities bar access to a property.
Coverage is typically triggered if there is direct physical damage to the premises.
Filing a claim
When filing a claim, read your policy or give us a call to determine how to best present it. It’s important to understand the policy’s limits and deductibles before spending time documenting losses that may not be covered.
If you are going to file a claim, document all damage. Keep receipts for all your inventory and fixtures.
In the event of a claim:
- Take photos of all damage.
- Contact your agent and file a claim immediately.
- Clean up to protect your building, but do not make major repairs until you talk to the insurance company.
- Keep receipts for any remediation work.
If you’re going to file a business interruption insurance claim, you will need:
- Pre-riot financial statements and income tax returns.
- Post-riot business records.
- Copies of current utility bills, employee wage and benefit statements, and other records showing continuing operating expenses.
- Receipts for building materials, a portable generator and other supplies needed for immediate repairs or remediation.
- Paid invoices from contractors, security personnel, media outlets and other service providers.
- Receipts for rental payments, if you move your business to a temporary location.
Note: Many policies require a 72-hour waiting period before a policyholder can begin making a business interruption claim. That’s because the first three days of business shutdown, access constraints or limited hours of operation because of a civil authority action, are often excluded from coverage.
There may also be a limit to the claim period. A standard limit is up to three weeks of losses.