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Understanding Business Insurance When a Riot Occurs

Vandalized business

In the days and nights following the death of George Floyd, a Black man, in the custody of four Minneapolis, MN, police officers, hundreds of thousands of people marched in dozens of U.S. cities to protest his death and to demand reforms to the law enforcement system. In some cities, the anger boiled over, and people burned stores and damaged businesses.

The images of smashed windows and looted shops in the wake of peaceful protests alarmed property owners concerned over whether their commercial business insurance policies cover damage from violent urban unrest. People who spent a substantial part of their lives building a business from the ground up want to know if they have the financial protection if vandals during a protest burn that business to the ground.

You want to be certain as a business owner that you have enough protection for your commercial property against damages incurred in civil unrest. The coverage for your business' insurance in California is worth taking a second look.

High Price of Protest

The May 25, 2020, death of George Floyd at the hands of police officers ignited long-simmering racial tensions between Black citizens and local police. Protesters across the country took to the streets, and vandals took advantage of the unrest.

The cost to commercial property owners and business operators was substantial. The estimated protest-related damage to businesses in the 20 largest cities is around $400 million, according to the Anderson Economic Group, a consulting firm focusing on public policy and industry analysis. Anderson Economic Group calculated its estimates on overall property damage; inventory lost to theft, cleanup, and rebuilding costs; and lost wages.

What Is Covered

Your commercial property is likely covered for damages that result from vandalism during civil unrest. Standard commercial insurance policies typically include coverage for loss or damage to the premises from looting, vandalism, and rioting. In most cases, loss coverage extends to the windows and doors, light fixtures, office furniture, computers, and inventory that's either damaged or stolen.

Loss of Income

Your business is also covered if you're forced to suspend operations due to direct physical damage from civil unrest or rioting. Coverage typically includes loss of net income—the profit earned after expenses and allowable deductions—and the cost of continuing operations.

You're also potentially covered if you have to shut down your business under civil authority orders, such as curfews. This most likely goes into effect if there's property damage from civil unrest within 10 miles of your business location.

Other Coverage

Damage from vandalism or rioting to your business may be covered, but you'll want to ensure that vehicles essential to your business are also protected. The cars and trucks typically are protected under your auto policy's comprehensive coverage. This coverage is optional and separate from collision and liability coverage, so you'll want to check your auto insurance policy and pay the additional premium to protect yourself and your business in the event your vehicles are caught in the middle of violent civil unrest.

Check Your Policy

Your commercial insurance coverage in California will show you in detail what applies to your business in case of damage from vandalism or rioting. Failure to maintain sufficient coverage is risky to you and your business at a time of unrest.

Consider California Brokerage Associates when it's time to review or renew your business or auto coverage. California Brokerage is committed to providing residential, auto, life, and corporate insurance at affordable rates. Call us today at 619-283-9999 for a quote.