Is my Business Covered from Rioting/Looting?

These are certainly unprecedented times.

For the past couple weeks, in the midst of the COVID-19 crisis, hundreds of thousands of Americans have been gathering to protest the murder of George Floyd by a police officer and support the Black Lives Matter movement. 

Unfortunately, as has always been the case with protests throughout history, opportunists are also using this time to riot and vandalize/loot businesses around the country.

We know as business owners, there are a lot of concerns on your mind every day, but rioting and looting usually isn’t one of them. If you fear rioting and looting at your business or are experiencing it, it can be scary and confusing, especially if it is something you haven’t had to deal with before.

Here at Berry Insurance, we get it. Not only are we a business ourselves, but we also work with several business clients comprising diverse industries and sizes who have unique concerns about how they could be affected by this conflict.

Fortunately, we have some answers. Let’s get into what insurance covers related to rioting/looting, and what to do if you are affected.

What business property insurance covers:

If you own a business in Massachusetts, you likely have property insurance for that business.

That insurance covers the actual structure of your business’ building (if you own it) and its contents, as well as the exterior features such as fencing, or signage from covered perils.

Covered perils include most weather-related damages, burst pipes, fires, explosions, and theft and vandalism.

So yes, rioting and looting is almost always covered under your policy as theft and vandalism and you should be paid for damages and stolen merchandise.

However, you will need to check with your agent or carrier to make sure. Sometimes, insurance policies carry exclusions against “civil unrest,” “civil commotion,” or “terrorism.”

Keep in mind, even if you are covered against rioting and looting, you will have to first pay your deductible before your insurance pays for damages or stolen property. The insurance company will also only pay up to the limit you set on your property insurance, so if the damage and theft is extensive, it might not be covered entirely.

What business interruption insurance covers:

Business interruption insurance, sometimes called business income coverage, covers lost income if a business is affected by a covered peril, such as weather-related damages, burst pipes, fires, explosions, and theft and vandalism.

If you have business interruption insurance and are affected by riots or looting, you should be covered up to your policy limits after you pay your deductible.

But what if my business was closed from COVID-19?

This is where things get tricky.

If your business was closed due to COVID-19 when it was affected by theft or vandalism, you will be covered under property coverage, but may have trouble getting business interruption coverage.

Unfortunately, closures from viruses, including COVID-19, are not typically covered under business interruption insurance because in order to be covered, the interruption must be caused by or result from a covered loss, which includes only physical loss or damage.

Because of this, many businesses are currently closed without business interruption insurance. If a business isn’t operational during the looting damage, there technically may be no “lost income” for that period of time, so business interruption insurance could limit compensation.

If this applies to you, don’t let it hold you back from filing a claim. Insurance carriers are well-aware that the combination of the COVID-19 pandemic and riots are creating unusual and detrimental circumstances, so they may be making exceptions and working harder to secure coverage for clients.

How to protect your business from rioting/looting

Civil unrest can cause a lot of worries for businesses.

With the potential threat of damaged property and stolen goods, it’s difficult to know the right steps to take to protect your business.

While the circumstances may be largely out of your control, there are some steps you can take to minimize damage or loss. 

Stay informed:

Keep up on local events through the news or local authorities. Knowing what may be going on in your area will help you to assess any threats to your business.

Assess vulnerabilities:

Inspect your property, both inside and outside to determine what your greatest vulnerabilities are.

Do you have gaps in security? Easily damageable materials? Inventory noticeably on display?

Evaluating your risks will help you determine where to focus your protection efforts.

Protect the physical property:

With your vulnerabilities in mind, take steps to implement security measures.

You can install additional locks, alarms, security cameras, or motion-sensing lights, or board up windows to make destruction more challenging for vandals.

Remove valuable property:

If looting is a risk, you may want to remove valuable property including cash, equipment (vehicles, machinery) and merchandise.

In addition to protecting the valuables, it may deter thieves all together if they look inside your business and see nothing of value.

Consider closing temporarily:

If the potential threats could put your employees or customers at risk, you may want to consider closing or altering hours, specifically if you are open during nighttime hours when the looting and riots are more likely to occur.

Get sufficient insurance:

Besides physically protecting your property, you should also make sure you have adequate insurance coverage so you can be reimbursed if your property is damaged.

Contact your agent or carrier to review your coverages and discuss if you may need any adjustments.

What to do if your business is damaged

If your business is damaged, take photos and document all damage and stolen goods before beginning cleanup.

Next, you will want to reach out to your agent or carrier to file a claim. You will need to provide those details and evidence you gathered of the damage.

If you haven’t boarded up yet, you may want to do so to deter additional vandalism.

Avoid making permanent repairs until you are confident the civil unrest in your area has subsided.

Keep your mind at rest during unrest

Things are tense in the world right now.

In addition to the root of the conflict, as a business owner, your worries during this time are likely also partially centered around your business and your well-being. 

Keep in mind that you are not alone during this time. Everybody is affected by this widespread issue and while there are some ways you can be involved, what happens to your business is largely out of your control. 

Fortunately, your insurance company is here for you during this time. If you have property insurance, business interruption insurance, and an agent or carrier willing to help you secure the right coverage options and limits, you can feel at ease knowing that when we move past this moment in history, your business will be OK. 

Don’t feel confident your insurance provider has your best interests in mind during these challenging times? It may be time to look for a better match. Check out this article about what to look for when selecting an insurance agency or company.