The riots throughout the United States have been heartbreaking on a number of levels. While the social and political implications will be something our country grapples with for years into the future, the economic effects will be felt immediately.
Small businesses, already devastated by the pandemic and government-mandated shutdowns, are now having to deal with damage from riots and looting. How are businesses going to recover from this double assault on their bottom line?
Ideally, most businesses have insurance to provide security in the event of riots or looting. However, many insurance policies have exclusions of or limits on activities that could be viewed as “terrorism.” We do not yet know how insurers will categorize the riots.
For those businesses that had been allowed to open, or re-open, during the pandemic and now have been forced to close their doors again, either because of riot-related damage or government-imposed curfews, business interruption insurance should cover those losses. Loss of merchandise should be covered by any business insurance policy.
Commercial policies contain coverage limitations, including a “waiting period” of anywhere for 24 to 72 hours before a policyholder can begin claiming the benefits of coverage. That period of business shutdown or limited operation because of other civil authority would not be covered.
Insurers could also assert various exclusions. Some policies may exclude coverage for riot or civil commotion. Additionally, some might try to assert a terrorism exclusion even if it should not apply. If your building is damaged, and has been vacant due to coronavirus, insurers might claim coverage is excluded because the building was vacant at the time of the damage.
Policyholders considering coverage should take the following steps:
- Review the policy. Analyze coverage and applicable exclusions, ideally with an experienced coverage attorney who can understand and interpret how the various sections interrelate.
- Write down all damage, expenses and lost income. You will need to provide proof of loss with your claim. That can include receipts, photographs, inventory, account books, etc.
- Mitigate your damage. Policyholders should take reasonable steps to minimize and repair damages. This includes repairing any broken doors or windows that would enable access to the property.
Kantor & Kantor is here to assist you as you navigate this complicated time. For a free consultation, please call 888-569-6013 or use our online contact form.