Riots, vandalism and civil unrest can create unique challenges for business owners-resulting in stolen, damaged or defaced goods and extensive property damage.
Here is an overview of the coverage, important coverage considerations, and best claim practices to consider...
Coverage for Riots, Vandalism and Civil Unrest
The following forms of commercial insurance coverage can provide protection in the event that your business suffers a loss related to riots, vandalism or civil unrest:
- First-party property insurance-This form of coverage can offer compensation for physical losses or property damage to the insured premises and contents. Losses caused by riots, vandalism or civil unrest are typically covered on both "named peril" and "all risk" commercial policies. However, be sure to review your policy to ensure it doesn't exclude these situations. Keep in mind that your policy might utilize different terminology for these situations (e.g., "civil commotion" as opposed to "civil unrest," or "riots" and "malicious mischief" as opposed to "vandalism"). Make sure you understand all policy definitions.
- Business interruption insurance-This type of policy (also known as business income insurance) can provide coverage for loss of income that results from having to temporarily halt business operations to recover from a physical loss or property damage to the insured premises. For your policy to be triggered, the halt of business operations must be directly caused by a physical loss or property damage that was incurred by a covered peril-such as a vandal smashing your property's windows with a brick.
- The civil authority clause-Most business interruption policies also include a civil authority clause, which can offer compensation when an action or order of civil authority temporarily prevents or restricts access to the insured premises-forcing the affected business to either limit hours or halt operations altogether. Although this clause still requires a physical loss or property damage to occur in order to be triggered, the damaged property does not necessarily have to be owned by your business-it typically just needs to occur within a set distance of your operations.
- Extra expense insurance-This type of policy can provide coverage for additional expenses that result from continuing business operations while the insured premises is being repaired or replaced due to a physical loss or property damage that was incurred by a covered peril. This might include costs such as the added expense of shipping necessary business supplies overnight rather than at the standard delivery rate in order to resume operations as soon as possible.
Ways to Maximize Coverage
Key ways to help make sure your business collects what is needed from an insurance claim.
- Insure to proper value - When we insure an inadequate building, contents or business income limit to keep the premium down, we risk not having enough insurance to cover our loss.
- Review limits of insurance annually - If we let our insurance policies automatically renew without an update or review we risk being massively under insured when a large loss occurs.
- Include "building ordinance or law" coverage - Standard insurance contracts exclude coverage for loss caused by the enforcement of building codes regulating the construction and repair of damaged buildings. Older structures that are damaged may need upgraded electrical, heating, ventilating, air conditioning (HVAC), roofing materials, fences and plumbing units based on city codes.
- Schedule all locations - Too often coverage is missing because a location is either not included or listed incorrectly.
- Inventory of others - It's important to make sure property owned by others is properly insured.
Best Practices When Making a Claim
If riots, vandalism or civil unrest take place within your community and result in losses for your business, consider these best practices when making a claim:
- Report it immediately - Be sure to report the incident right away to the local authorities and consult your broker for immediate claims assistance.
- Prevent additional losses - When the loss occurs, try to do everything you can to mitigate the risk of further damages (e.g., boarding up your property's windows and doors). However, only take these precautions if it is safe to do so. Avoid any mitigation measures that could put you or your employees at risk of injury or fatality.
- Beware of waiting periods - Make sure you consider any waiting periods or other deductibles that might apply when making a claim. For example, many business interruption policies are subject to a 72-hour waiting period-meaning that you won't be covered for any loss of income that occurs for the first three days following the incident.
- Document all expenses and damages - To ensure the best possible compensation for your loss, be sure to document the full extent of the damages that your business incurred by taking plenty of pictures as evidence. Further, make sure you keep track of all expenses related to the loss by saving receipts and bank statements.
VANTREO is here to help. Taking care of our communities, our clients, and our team members is a fundamental part of who we are. If you would like more information on Riot, Vandalism & Civil Unrest Insurance, or need our assistance in any way, just let us know. Call us or Reply here...and please stay safe!