Does Insurance Cover Riots and Looting?

by Millie Workman, CPCU, AU, CRIS, MLIS, AFIS, ERIS, TRIP, and Trevor Antley | Sep 15, 2020
Most insurance does cover damage from rioting, looting, and civil unrest

When civil unrest, rioting, and looting break out, many business owners and homeowners are justifiably concerned about property damage. Sometimes even peaceful protests can escalate and lead to vandalism and riots, and bad actors frequently take advantage of large-scale gatherings to destroy property, set fires, and/or cause other damage to public and private property.

So many people are asking — Does insurance cover riots and looting?

The answer: Yes, standard insurance policies usually cover damage that results from rioting, looting, vandalism, and/or civil commotion. This would include damage caused by rioters as well as damage caused by the reactions of police and civil authorities during a riot.

Business Owner Insurance for Riots & Civil Disturbances

For businesses who have purchased property coverage, their commercial property insurance policy will cover losses from protests, riots, and civil disturbances. Commercial property insurance covers damage that results from vandalism, rioting, and civil commotion. These policies specifically include coverage for acts of looting in connection with a riot or civil commotion.

Many business owners have a businessowners policy (BOP), which combines property, liability, and business interruption coverages. These and virtually all other commercial insurance property policies should cover any damage to a business’ physical structure and its contents resulting from vandalism, rioting, or civil commotion. This usually includes any damage to exteriors, doors, light fixtures, and windows, as well as interior damage and damaged or stolen contents including computers, machinery, office supplies, furniture, etc.

Coverage for plate glass windows is often not included and needs to be purchased separately because of their high risk. Businesses with a BOP can also opt-in for additional coverage for things like criminal activity, spoilage of inventory, and more.

BOPs are intended for small to midsize companies, normally with no more than 100 employees and $5 million in revenue. BOPs cost on average $1,200 a year, according to the Insurance Information Institute (Triple I). Coverage purchased as a single package is meant to be less expensive than if the coverage were purchased through separate insurance policies.

Note that some businesses, such as restaurants, may not be eligible for a BOP if there are specific risks inherent to their business. These businesses will need to purchase individual coverages separately.

Business Income Coverage During Riots & Civil Commotion

Business income insurance — also known as business interruption insurance — could cover lost income if the business is forced to suspend their operations or limit hours due to rioting. However, this is only triggered if the business’ premises are physically damaged. Under most policies, business income coverage includes both net income (the profit a business earns after expenses and allowable deductions) and the business' normal operations cost.

Business income coverage is typically subject to a waiting period. “The waiting period applies to income losses, including those insured under civil authority coverage,” says Loretta Worters, Vice President of Media Relations for the Insurance Information Institute (Triple-I). “It does not apply to extra expense losses. A typical waiting period is 72 hours.”

Under most policies, business income coverage includes both net income (the profit a business earns after expenses and allowable deductions) and the cost of continuing normal operations. In order to support a business income claim, most insurers will require the following:

  • Income tax returns
  • Sales records
  • Payroll records
  • Profit and Loss statements
  • Mortgage or rent statements

Civil authority provisions also provide coverage for lost income and/or extra expenses resulting from access to the business being prohibited by civil authorities like the fire department, police, or National Guard due to rioting or civil commotion. Civil authority provisions will only cover lost income during a limited time period, usually four weeks. This can be extended by paying additional premiums.

Homeowner Insurance for Damaged Property

Typical homeowners insurance policies cover damages that result from vandalism, rioting and civil commotion, fires, explosions, etc. This coverage includes damage to structures on the property, as well as to personal property and possessions inside and outside the home.

If the damage is extensive enough that you can no longer live in your home, standard home insurance policies and renters insurance policies may cover the cost of living away from home. Coverage for additional living expenses (ALEs) can be used while your home is being repaired or rebuilt, and ALEs can include the cost of things like hotel bills, meals, and other necessary expenses.

Auto Insurance for Damage from Riots & Civil Commotion

Damage to vehicles, whether business vehicles or personal vehicles, that results from a riot, civil commotion, vandalism, fire, falling objects, and other unforeseen risks is covered under the optional comprehensive portion of an auto insurance policy. Comprehensive coverage also covers cracked or shattered windshields. Additionally, some companies will offer policyholders glass coverage with no deductible. Roughly 75% of drivers in the U.S. choose this optional comprehensive coverage as part of their auto policy.

Learn More About Property Insurance With WebCE

Insurance professionals who want to learn more about insurance coverage for riots, looting, and civil unrest should order the Commercial Property Insurance course from the WebCE course catalog. To properly insure your clients and design the optimum insurance program for their business, producers should have a clear understanding of the coverage available.

WebCE offers many other Insurance CE courses for insurance agents and adjusters. To order courses, visit our course catalog below or call our customer service representatives at 877-488-9308.

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