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