Forget about the politics. That’s not germane here. What business owners want to know more than anything else is, will their insurance cover damage to storefronts caused by looting and rioting.
In one of the most recent examples of this, hundreds of people engaged in widespread rioting and looting for several hours in Chicago after people clashed with police over an officer-involved shooting. Dozens of stores were looted along the Magnificent Mile shopping district, as well as other areas of the city.
It was all disturbingly reminiscent of the civil unrest seen in cities such as Portland, Seattle, Los Angeles and elsewhere this year.
A preliminary estimate from insurance industry analysts suggested insured losses in 2020 due to looting and rioting ranged from $500 million to $900 million, a figure that will change as the data is refined.
So, do your insurance policies cover all of this?
The short answer is, yes, your business policies typically do, including damage caused by the response of police and civil authorities during a riot.
Let’s break it down a bit.
First, damage to the physical part of a business and its contents that is caused by fire, riots, civil commotion or vandalism is generally covered under a standard Business Owners Policy, also known as a BOP. Coverage for plate-glass windows, however, is often not included and needs to be purchased separately.
Businesses that are forced to suspend operations or limit hours due to rioting may have coverage for the loss of income under business income insurance, which also is known as business interruption insurance. There must be direct physical damage to the premises for this sort of policy to kick in.
Business income coverage is typically subject to a waiting period of 72 hours.
There’s also a “civil authority provision” in business policies that provides coverage for lost income and extra expenses in the event the police department or fire department bars access to a specific area as a result of direct physical damage caused by a riot or civil commotion.
Typically, civil authority provisions will only cover lost income during a limited time period, usually four weeks.
The rioting and looting we’ve seen this year across the country should serve as a good reminder to take a second look at your property insurance.
Business owners, especially retailers, oftentimes underestimate the value on their property — either unknowingly or to save money on their premiums. That’s never a good move, leaving them under-insured at a time when they might need coverage most.
Michael Ferentinos is an insurance advisor in CCIG’s Commercial Lines department. Reach him at Michael.Ferentinos@thinkccig.com or at 720-212-2043.
CCIG is a Denver-area insurance, employee benefits and surety brokerage with clients nationwide. We do more than make sure you have the right policy. We help you manage your long-term cost of insurance with our risk and claims management expertise and a commitment to service excellence.Back to Resources