Individuals purchase insurance policies because they intend to transfer the risk associated with certain assets. Hence, there are common policies like business insurance, auto insurance, home, and personal insurance. However, it becomes unclear for business individuals in knowing what specifics your policy covers, as in this case, insurance for riots looting.
This is the one question on every business owner’s mind. Do insurance cover riots and looting? Keep reading to find out.
What is the importance of business insurance?
First, if you have not purchased business insurance, then don’t even bother. There is no way you can claim insurance for riots and looting. We, however, think you already know that. Business insurance is a policy that covers your business assets from unexpected mishaps and crises during rough times. The policy contract is usually written to cover general incidences, including misfortune, tragedies, perils, etc. and some specific ones.
Does insurance specifically cover riots and looting?
Since the pandemic, business owners have been on the neck of insurance providers, trying to make claims for business interruption. Insurance providers, on the other end, spent the whole pandemic proving to business owners that their contract does not include a clause for situations like COVID-19.
Now, a fresh wave of claims could knock on their doors, and this time, it’s something tangible and does not leave much room for maneuver. Do insurance cover riots and looting? The generic answer will be YES. Various business insurance plans cover damages resulting from vandalism, looting, and other civil commotion. This includes damages incurred by businesses during a riot.
Insurance for riots and looting – What’s the catch?
Now the tricky part is what your claim specifics would be. Although business insurance covers damages from riots and lootings, the specifics differ from one individual to another. If you are a business owner whose shop was among those vandalized and looted, your insurer will compensate you.
To settle your claim, your insurer would refer to the specifics in your policy contract. Depending on the type of business insurance, they would compensate for some damages and not for others.
The available types of business insurance include:
- Personal liability insurance
- Product liability insurance
- Vehicle insurance
- Workers compensation insurance
- Business interruption insurance
- Property insurance
For instance, if you purchased business interruption insurance only, there is a good chance that you would not receive any compensation. This is because interruption insurance compensates for business losses when you are unable to run your business. Many times, it does not include vandalism.
You could also purchase a business insurance policy that combines all the different types of business insurance. This, however, means you would pay a much higher premium, although cheaper than purchasing each business insurance separately. If your policy combines the whole scope, then we can assure you that your insurer would provide compensation.
Riot, vandalism, and looting are covered perils basically under all commercial property policies. You must know, however, that each claim is different and is evaluated on individual grounds according to the terms of your policy. In the end, your policy contract determines the nature and extent of your claim.
While it is true that they would compensate you, the extent of compensation boils down to your specific policy contract. What are the kinds of items covered? Did you meet the minimum requirements to make a claim? (Some insurance companies require a form of protection system to be in place, e.g., alarm system). Answering these questions would help you estimate the extent of your claim power.
If hoodlums vandalized your business, the first thing to do is inform your insurance company and then proceed to gather as much evidence as you can for proof.