Is Looting/Criminal Rioting Covered by Insurance Companies?

Insurance companies cover criminal rioting during a time of emergency. The insurance will pay for damages if a homeowner’s policy includes a rider for such emergencies.

There is a difference between looting and criminal rioting, though both can have the same effects on residential property. Looting is defined as entering an establishment with the intent to rob it. Criminal rioting is simply any public disturbance that rioters or looters have committed.

The question is, does the insurance industry cover the damage done by looters/rioters? The answer is yes.

Any policy, whether it be a homeowner’s, renter’s, or automobile policy, will provide coverage during the time of an emergency. This type of civil authority coverage can also extend to other scenarios such as terrorist attacks and earthquakes. All leads to massive business interruption and availing business interruption insurance is on the mind of all owners of business property.

What To Do If Your Business Is Affected By Looting/ Criminal Rioting?

If your business is affected by looting or criminal rioting, the following steps may be helpful:

– If you’re a small business owner and your building was not looted, it is essential to clean up and secure the property.

Are Riots Covered By Insurance?
Are Riots Covered By Insurance?

– If your building was looted, but there’s no structural damage to the building, call someone who can help secure your property. You can also make a report with local law enforcement.

– If you have been personally assaulted in any way, call 9-1-1 right away and get medical attention at a hospital or clinic.

– If your business has been looted and you want to claim with your insurance company, call them immediately.

– Document everything about the event related to your property, like the timing of the event, any injuries that occurred, and information about victims or suspects (names, birth dates, addresses, etc.). Make sure photographers take plenty of pictures when cleaning up and keep track of names, quotes, and contact information for all service providers like police investigators.

– Get a list of documents that you will need to make a claim: an estimate of damages, detailed inventory, photographs, and any other vital records or documentation that relate to your losses.

– If the business cannot open in the immediate future, document the precise time that the business was closed.

– You can start making an inventory of your losses immediately after the damage occurs.

Are Riots Covered By Insurance?
Are Riots Covered By Insurance?

What Constitutes Riot Or Civil Commotion And Vandalism?

Civil disturbance and vandalism is a severe crime in the United States. The law defines the terms as referring to the commission of acts or threats against another person or unlawful interference with property.

Any other type of civil disruption, such as a riot, would also be included under the terms. For an act to constitute riot or civil commotion, it must involve four participants who are acting in concert with one another. Two of these individuals must use violence or force while committing three participants must do so without any weapons.

Are Riots Covered By Insurance?
Are Riots Covered By Insurance?

Homeowners insurance

Homeowners insurance provides coverage for personal property against damage or loss caused by weather, fire, theft, vandalism, and other unforeseen events. It also includes liability coverage, which covers injuries or damages to other people.

Such insurance claims are usually paid by the homeowners’ insurer directly to you or your contractor to begin repairs. You aren’t expected to come up with the money out of pocket and wait for reimbursement. Some instances are allowable (for example, if you need to hire a specialty contractor that won’t accept your insurance carrier), but it is not the norm.

Auto insurance

Auto insurance is a type of property and casualty coverage concerning automobiles. A comprehensive auto insurance policy provides the business owners with coverage against losses resulting from incidents other than a collision with another object or overturning, including vehicle theft, fire, weather damage, and vandalism. 

A typical auto insurance policy is broken out into bodily injury and property damage liability sections and various additional coverages. These coverages include collision coverage, uninsured or underinsured motorists coverage, medical payments or PIP, comprehensive coverage, and more.

Check here to get details from the Insurance Information Institute.

Business Owner Insurance for Riots & Civil Disturbances

A general policy liability is not enough when riots, civil disturbances, and other public disasters strike. Rising health care costs and legal fees make it more difficult for doctors and lawyers to operate their practices profitably. If these professionals can’t afford to pay for malpractice insurance, they may not be able to survive in today’s competitive marketplace.

To help keep doctors and lawyers in business, some business owners are adjusting their malpractice policies. They’re ordering protection against riots and civil disturbance coverage with the same degree of coverage that they offer against damage from hurricanes or floods, says Steven Lopes of the American Bar Association (ABA).

Business Income Insurance Coverage During Riots & Civil Authority insurance

Business interruption insurance policies typically contain an “extra expense” or “additional expense” clause, which provides coverage for the additional cost of operating the business due to riots and civil commotion. The insured’s normal operations must be obstructed by rioting; the policyholder must suffer lost income due to the rioting, excluding government-mandated or ordered evacuation. The insured must have continued to provide services despite the rioting.

Does Business Income Insurance Cover Riot & Civil Commotion? What are Exclusions?

As with all insurance policies, some exclusions will apply to specific claims.

Exclusions will be triggered if:

  • -The rioting occurs only in the insured’s location or premises;
  • -The rioting does not affect the insured’s normal operations, not even a temporary disruption of business activity;
  • -The insured fails to continue to provide services despite the rioting;
  • -The insured fails to follow all reasonable instructions issued by the Insurer;
  • -An order, demand, or requirement of any governmental authority other than an order to evacuate the premises. An order to evacuate means either a measure taken or recommended by authorities designed to secure the health and safety of persons during the rioting, not one which merely restricts access to an area that is riot-prone.
Are Riots Covered By Insurance?

Homeowner Insurance for Damaged Property Insurance

There is a distinction between two different types of homeowner’s insurance in many countries: HO-1 and HO-2. HO-1 is for what is known as comprehensive property coverage, which is a more expensive option that covers a variety of perils. This insurance includes protection from perils such as fire, lightning, explosions, smoke damage, theft or vandalism to your property and garage, and physical damage from glass breakage for which you can get glass coverage.

The HO-2 plan covered peril such as windstorms, floods, earthquakes, and the weight of ice and snow. With this plan, you can also be insured from most risks against tenants living on your property. It also covers public liability for claims due to injuries on your property.

The problem with this kind of insurance is related to the deductible clause. The general idea is that your insurance company will pay for damages up to a certain amount. After that, you are responsible for paying for the rest yourself (you can choose a higher amount or lower).

Auto Insurance for Damage from Riots & Civil Commotion

There is a need for insurance companies to create a new type of optional coverage for this type of occurrence. Part of the reason is because of the considerable risk involved with riots and civil commotion. Riots can result in physical damage, such as cars being set on fire and homes and businesses vandalized or even broken into. During the civil commotion, people may be injured or killed. Those persons who suffer losses due to these events must be compensated quickly and efficiently.

In the City of Los Angeles in 1992, when the riots occurred, many companies received claims for property damage from fire and vandalism. In most cases, these losses were not generally covered by a commercial insurance policy because the policies only paid if there was a fire. There is a need for insurance to cover this type of loss in the event of civil commotion. Not only would this be beneficial for the companies involved, but more importantly, the policyholders who suffer losses would be compensated quickly and efficiently.

Creating a new type of coverage for this type of occurrence requires an experienced insurance professional to work with various government levels and with significant insurers in developing a policy framework. The parameters of this framework should be to provide for the coverage of damage by the civil commotion, which includes physical damage to property caused by mobs or riotous assemblages.

Are Riots Covered By Insurance?
Are Riots Covered By Insurance?

What If Your Claim is Denied?

If you’re denied riot insurance, you need to find an alternate way to protect your property. You can take out precautions in the event of a riot to minimize damages. The first step is to contact your homeowner’s association and see if they offer any insurance to cover riots or civil unrest.

Many business owners also purchase “excess liability” or “umbrella” insurance. This form of protection would cover anything that isn’t generally covered by your primary home and auto insurance policies. It costs extra money, but it is considered the best secondary policy to cover riots, protests, and civil unrest in most major cities.

Additionally, you can also purchase specific riot insurance to cover riots in the area that you live. This form of protection can cost anywhere from 10% to 30% more than a standard homeowners policy, but it is worth the cost depending on how much your home is worth and what valuables you keep inside.

In some cases, if you’ve been denied riot insurance, you might not be able to cover damage. When the riots and civil unrest occurred in Ferguson, MO., many homeowners tried to file a claim and were denied because they live outside the city.

Business Income Coverage: Impact on Your Business

The term “business income coverage” might sound a little bit intimidating, but it doesn’t have to be. Business income coverage is a type of insurance that can provide financial protection for your business in an unexpected loss. This type of policy does not cover everything but covers many losses that entrepreneurs may face. What’s important to understand is that the key features of business income coverage are tailored specifically for your business to cover lost income.

Small businesses with employees should carefully consider their options before purchasing this type of policy. This type of policy should also be considered a supplement to guaranteed savings and should not replace other insurance policies such as health and life insurance. The first thing you’ll want to do is thoroughly determine what your needs and goals are. Will you require 100% protection, or will less than complete coverage do the trick and keep your premiums and deductible reasonable?

Remember, business income coverage is tailored to meet your specific needs as business owners or entrepreneur. For example, many policies provide different levels of coverage for equipment that is rented from other companies- renters insurance policies. Still, some also cover your fleet of vehicles, which could include cars and trucks. In either case, it is essential to examine all the potential risks that a business income coverage policy would cover before deciding to purchase one.