Property and casualty companies were already struggling with business interruption claims from the pandemic when yet another national calamity slammed the industry –rioting across the nation that is destroying commercial and public buildings, residences and vehicles.
There is a key difference in the latest catastrophe, P/C companies are in fact more liable in cases of civil unrest than they are in pandemics.
Carriers typically exclude pandemics from business interruption coverage, but some policies did actually cover them. Some policyholders, public officials and advocates are arguing that insurers should cover the losses. But the industry is saying that it cannot possibly underwrite all of the costs.
In the case of rioting that broke out after the death of a black man in police custody in Minneapolis, insurers are on the hook for paying many of those repair bills.
The following is according to the Insurance Information Institute:
Damage to cars is covered under the optional comprehensive portion of an auto policy. This provides reimbursement for damage to the vehicle and its contents caused by fire, falling objects, vandalism or riot. Comprehensive coverage will also reimburse you if your windshield is cracked or shattered. Some companies offer glass coverage without a deductible. Approximately three-quarters of U.S. drivers chose to buy this optional coverage as part of their auto insurance policy.
Standard homeowners policies will cover damage to the property caused by fire, an explosion, a riot or civil commotion, vandalism or malicious mischief. This would include coverage to the structure of the home, as well as any personal possessions.
If you cannot live at your home because it was damaged by an insured disaster, standard home (and renters insurance policies) provide coverage for additional living expenses (ALE). This pays the costs of living away from home. ALE covers hotel bills, restaurant meals, and other expenses incurred while your home is being rebuilt.
Damage to the physical plant of a business and its contents that is caused by fire, riots, civil commotion or vandalism is covered under a Business Owners Policy (also known as a BOP). However, coverage for plate glass windows is often sold separately.
Businesses that are forced to suspend operations or limit hours due to rioting may have coverage for the loss of income under business income insurance—also known as business interruption. However this is only triggered if there is direct physical damage to the premises.
A “civil authority provision” in a business policy provides coverage for lost income and extra expenses in the event the police or fire department bars access to a specific area as a result of the danger caused by a riot or civil commotion.