Tuesday, April 28, 2015

WITH THE RIOTS IN BALTIMORE, MD, ARE BUSINESS AND HOMEOWNERS COVERED FOR THEIR PROPERTY DAMAGES




It appears to be a misconception that homeowners and business owners are not covered against civil disorder. 



Two routine policies, the Business owners policy (BOP) and the homeowners' policy (HOP), would offer cover against damage caused by the Baltimore riots, provided the loss (be that bodily injury or property damage) is neither expected nor intended from the standpoint of the insured.



Typically a BOP would include full replacement compensation for "Riot and Civil Commotion" and for "Vandalism". BOPs can also offer "business income" coverage, provided there is a direct physical loss of or damage to the property. In other words, insureds could not make a claim on the grounds that fewer tourists were coming to Baltimore as a result of the riots, or that their particular part of town was less popular as a result of the riots.



The business income also only covers a short-term "period of restoration", that being the time taken to repair the damaged property at "reasonable speed" or, if the property is a write-off or could not be repaired at a reasonable speed, then the date that the business moves to a new permanent location.



The BOP also offers cover should Civil Authorities prohibit access to a premises, even if that premises is not damaged. That would include a police curfew, barricades and other restrictions on access.



Since Baltimore has instituted a week-long overnight curfew, this would presumably enable businesses that function during curfew hours to make a claim.



A typical Homeowner policy also covers Riot or Civil Commotion and Vandalism, provided the home has not been vacant for more than 60 consecutive days.



According to the Insurance Information Institute, the biggest insured loss riots in the US were in Los Angeles in 1992, also known as the Rodney King riots.

Those riots generated roughly $1.3bn in insured damages in today's dollars.



Of the 10 most expensive US riots on record, seven were in the 1960s.



The death last year of Michael Brown in suburban St. Louis was estimated to have caused insured losses of less than $10m, indicating that natural catastrophes are still more likely to hit insurers for major losses.





COVERED ITEMS UNDER A BASIC POLICY

Fire or Lightning

Explosion

Riot or Civil Commotion

Smoke

Vandalism

Vehicles or Aircraft

Wind or Hail



COVERED ITEMS UNDER A SPECIAL POLICY

Fire or Lightning

Explosion

Riot or Civil Commotion

Smoke

Vandalism

Vehicles or Aircraft

Wind or Hail

Bursting of Fixtures

Electricity

Falling Objects

Freezing

Water Damage

Weight of Ice, Sleet or Snow

Theft