Good News For Businesses Damaged During Riots: Insurance May Cover Your Losses

McCarter & English, LLP

During the days and weeks following the death of George Floyd at the hands of Minneapolis police officers, protests erupted in every state across the country. Although most of these protests remained peaceful, there were instances of criminal misconduct and property destruction, such as the breaking of storefront windows and doors, theft, and even setting structures ablaze. For those businesses that suffered losses, we have a bit of good news: insurance may help.

A policyholder must review its specific insurance policies to analyze the policies’ scope of coverage, exclusions, and terms. That said, broadly speaking, a commercial property policy covers damage to property and its contents when caused by fire, riots or civil commotion, and/or vandalism. It also covers expediting costs, debris removal, and business interruption, including from riots, malicious mischief, vandalism, and civil commotion. Crime policies generally cover loss resulting from theft and resulting physical damage.

For example, a property policy’s “Building and Personal Property Coverage” form (ISO Form CP 00 10) provides: “[Insurer] will pay for direct physical loss of or damage to Covered Property at the premises described in the Declarations caused by or resulting from any Covered Cause of Loss.” “Covered Property” typically includes the building, business personal property (including furniture and fixtures, machinery and equipment, and “stock”), and personal property of others that is in the insured’s care, custody, or control and located in the building or within 100 feet of the premises. The policy also sets forth specific types of “property” that are not covered – for example, currency.

The ISO commercial property policy includes one of three different “Covered Cause of Loss” forms. The first two forms – the Basic Cause of Loss form, and the Broad Cause of Loss form – are generally known as “named perils” forms. These forms specifically list the covered causes of loss

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