Thousands of businesses across the country engulfed in large cities and areas of civil unrest have reasonable concern over the safety of their business and the risk of property losses and damage. When protests escalate to vandalism, looting, and civil commotion, the question of what’s covered in the aftermath of fires, property destruction, and damage surfaces for many.
Keep in mind as this article dives into the basic forms and standards of coverage for commercial and personal lines of policy, that independent insurance agencies can customize plans to meet the needs of the customer. Quotes and prices will also vary by agency and level of protection. The only way to know if your policy or the proposal that you received online will provide the same or better coverage is to review the forms.
Does Business Insurance Cover for Looting, Riots, and Associated Property Damage?
The good news is that most business insurance policies provide a level of protection against these occurrences.
A commercial property insurance policy specifically outlines coverage from damage that spawns from looting, rioting, and civil commotion. Most businesses have a commercial package policy to combine liability, property, and business interruption. Plate glass windows are typically not covered and may need to be purchased through a separate policy. Opt-ins for criminal activity, spoilage of inventory, and more can also be added on.
An important disclaimer is that some businesses may not be eligible for a BOP if risks are inherent, and will need to purchase each coverage item separately.
What is Civil Commotion?
Civil commotion is a large gathering of people revolting in a public place. The definition of riots and looting in insurance terms can be hard to determine, especially if listed together. Although there are a few definitions to the word riot, it’s commonly outlined as a gathering of at least three people causing a public disturbance through an act of violence. An intentional destruction of property is what defines vandalism.
Property and Building Damage
Vandalism, civil commotion, and looting can be categorized as causes of loss in business insurance policies labeled for perils and “all risk.” These policies don’t exclude looting, vandalism, or civil commotion, and should allow the business to qualify under their coverage.
Parts of the building such as some windows, lighting fixtures, and doors count under building coverage in most policies. Tables, chairs, desks, and other items damaged or stolen would qualify under business personal property coverage. Some limits or deductibles may occur, but it varies on the policy standards.
Commercial Vehicle Damage
The comprehensive coverage of a commercial auto policy ensures that reimbursement will be provided for damage to a vehicle from fire, objects falling, riots, and vandalism. Comprehensive coverage will also protect the policy holder in the event of a windshield cracks or shatters. Not all, but some insurance companies will even offer glass coverage with no deductible.
Business Loss of Income Insurance
Business income insurance is for loss of income due to forced closure or during the period of restoration. Other added costs such as rush delivery for supplies needed in order to reopen as quickly as possible may also be accounted for under extra expense coverage.
In the case of a fire department, police, or National Guard ordering a street closure, civil authority coverage works to protect the business in that scenario. Access to the business or ability to open must be prohibited due a covered peril that caused damage to property not located at your premises. This coverage typically only lasts up to four weeks, but can likely be extended with increased premiums.
Business income coverage is commonly subject to a waiting period (type of deductible) of usually 72 hours. This entails that the period of restoration begins 72 hours after the income or physical loss. If a business’ income coverage includes a 72-hour waiting period, there will be no coverage for the income that is lost during the three days a business is shut down. However, the 72 hour waiting period can be removed at little to no additional cost by endorsement depending on the insurance provider.
Learn More About Small Business Property and Building Insurance
For more information about your policy and knowing what to expect in the inevitable, the best way to know what’s covered is consulting directly with your agent. At Frost and Remer, we’re an independent insurance agency all about protecting your business, your family, your home, and the assets that help you carry out your day-to-day. For more questions on what your business needs in order to prevent losses or damage due to riots, vandalism, or civil commotion, schedule a free virtual consultation with us.