Reed Smith Client Alerts

Riots, civil commotion, and vandalism have occurred in some cities across the nation. Some businesses have suffered losses due to looting, damaged business property, stolen inventory, broken glass, destruction of the interior of a store, graffiti, smoke and fire damage, and the cost of removing debris. Common commercial policies provide coverage for damage caused by riots, civil commotion, looting, or vandalism as well as by the reactions of police and other authorities during a time of civil commotion.

Auteurs: Adrienne N. Kitchen David M. Halbreich

Property damage, including buildings and business property

Most commercial property insurance policies cover damage to buildings and business property caused by riots, civil commotion, and vandalism. Under an all-risk property policy, all risks of direct physical loss to business property are covered unless specifically excluded. Other property policies provide coverage for certain named perils, unless otherwise excluded. While landscaping, signs not attached to the building, and some types of property such as fences may be excluded, there is often limited coverage subject to sublimits provided under coverage extensions.

Protection of property coverage

Under “protection of property” coverage, businesses may be able to recover for costs to move property to a different location to protect it, and then to return it to its original location. Some policies have broader coverage for expenses for actions businesses take to temporarily protect or preserve property from these types of losses. This type of coverage is generally subject to sublimits.

Business interruption coverage

Most property policies cover lost business income following a physical loss or damage, such as that caused by looting or vandalism, while the policyholder repairs, replaces, or restores that property. This coverage is often subject to a waiting period, typically 72 hours.

Extra expense coverage

Most property policies cover extra expenses businesses incur to continue operating while the damaged property is being repaired, replaced, or restored. This could include, for example, expenses related to hiring security or other safety measures, such as boarding up broken windows to secure the property and prevent further damage or to prevent harm to others while the property is being repaired.