Understanding Your Commercial Property Coverage in Regards to Civil Unrest, Riots and Vandalism

Image of smashed door window

Standard commercial property policies will respond to direct physical loss of or damage to covered property caused by fire, explosion, riot or civil commotion, vandalism or malicious mischief.  This would include coverage to the building structure as well as any business personal property contained in or around the building premises (with certain restrictions), and business income losses.

Rioting, civil commotion and vandalism are covered perils under virtually all business owners and commercial insurance property policies ― both named perils and “all risk” policies.  All risk policies provide broader coverage, but the perils of riot, civil commotion and vandalism are specifically included under named peril policies as well.    

The following provides a breakdown of the various types of coverage under the standard commercial property policy along with further information related these coverage sections.  

Building

This includes damage to the building structure itself.  Windows, doors, light fixtures and other permanently affixed items that are part of a building should be covered under the building property coverage of the policy. Glass is usually part of covered property as long as it is part of a building or structure, i.e., store windows and plate glass on office fronts.  However, there could be some policies that need to have special glass endorsements added to the policy.  

Business Personal Property

Contents of the insured building or equipment that services the insured building which is damaged or stolen from the business premises should qualify for coverage under the business personal property coverage of the commercial policy. This could include furniture, fixtures, equipment, machinery, office supplies, computers, stock, liquor, glassware, etc.

Business Income/Business Interruption

Businesses that are forced to suspend operations or limit hours due to rioting, vandalism or civil commotion and have coverage for the loss of income under business income/business interruption insurance will be covered.

Businesses that incur extra expenses to continue operations while the insured premises is being repaired or replaced may be insured under the extra expense coverage provided in most property policies.  Typically, this coverage is afforded for costs incurred to reduce a covered loss of business income.

Coverage under the property policy for business income loss is typically triggered if there is direct physical damage to the premises, and it is often subject to a waiting period.   This waiting period applies to income losses, including those insured under civil authority coverage. It does not apply to extra expense losses.  A typical waiting period is 24 or 72 hours.

Civil Authority 

Business Income/Business Interruption insurance typically includes civil authority coverage which provides loss of income that occurs as a result of prohibited access to your premises by a civil authority or government entity.   Civil authorities can bar you and others from entering your business in situations related to protests, riots and/or civil unrest.  The access must be prohibited due to damage by a covered peril to property not located at your premises, but within a specified distance.  

Civil authority insurance covers income lost during a limited period of time, typically 30 days.  There may also be waiting periods involved as well.  

Contingent Business Interruption & Contingent Extra Expense

Contingent business interruption insurance and contingent extra expense coverage is an extension to other insurance that reimburses lost profits and extra expenses resulting from an interruption of business at the premises of a customer or supplier.

Damage to Vehicles

Automobiles and all other insured vehicles are covered under the optional comprehensive physical damage portion of the Auto policy.  This coverage provides reimbursement for damage to the vehicle and its contents caused by fire, falling objects, vandalism or rioting.

Comprehensive coverage will also provide reimbursement to windshields that are cracked or shattered. Deductibles typically apply under comprehensive physical damage coverage.  However, some companies offer glass coverage without a deductible.

Questions regarding potential claims under various policies which result from circumstances related to riot and/or civil commotion can be discussed with RCM&D claim consultants.  

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