Riot insurance: Is my business protected?

As a small business owner, you want to make sure your business is protected from financial losses or damages due to events out of your control. That’s what small business insurance is for.

But what happens if there’s civil unrest in your area? Is your business protected, or do you need separate riot insurance?

In this article, you’ll learn more about small business coverages that help protect your business in times of uncertainty—including coverages for vandalism—and you’ll get answers to some common questions about riot insurance.

What is riot insurance? Is there such a thing?

Riot insurance is a term that’s most often used by business owners looking for additional protection for circumstances surrounding civil unrest. Still, in most cases, it’s not a separate coverage or policy that you have to sign up for. You may already have the right coverages in place through your existing business insurance policy.

When people refer to “riot insurance,” they’re often referring to specific coverages that protect businesses from financial loss due to named perils such as fires, vandalism, looting, or loss of income caused by interruptions due to civil commotion or unrest. For many retailers, historical riots in Los Angeles, or more recently, Minneapolis and New York City, are reminders that they need robust coverages in place during times of uncertainty so they can continue serving their community during and after civil difficulty.

Many standard Business Owner Policies (BOP) bundle of most-needed business insurance coverages, including the coverages you’ll need for commercial property damage or income loss due to vandalism, fires, or looting. (We’ll cover this more in-depth later in this article.)

However, policyholders do need to confirm with their insurance company that the insurance they have in place includes coverages that their business needs specifically. For example, some businesses need to buy additional insurance to cover food spoilage due to outages or certain types of broken windows.

What is the purpose of "riot insurance?”

The purpose of riot insurance is to protect your business from financial loss in the case of damages to your property or lost income due to civil disturbance, unrest, or rioting.

For example, let’s say you own a coffee shop near the courthouse in your town, and a riot took place after a recent peaceful protest about local court rulings. Your coffee shop experiences some physical damage: It was broken into by rioters, and some merch and point of sale (POS) equipment was stolen. Not only was your building damaged and some of your property stolen, but several businesses were affected, and the local civil authority decided to shut your block down until it’s safe to return to the area.

This shutdown caused an interruption in your income—you can’t have any customers while the block is closed and your equipment is being repaired—but you still have rent, utilities, and employees to pay.

This is where having the right business insurance in place is crucial. While you hope never to use it, your business insurance can help reduce financial loss when normal operations are interrupted, or your business property is damaged or stolen.

Does insurance cover riot damage?

Yes, but you’ll need to check with your insurance company and policy for details on what’s covered, or what the insurance industry calls a named peril, and what’s considered an excluded event, something that is specifically not covered by your policy.

A few business insurance policies do include coverage for damage or other losses due to riots and civil unrest, and we’ll discuss those coverages below.

How is riot insurance different from other types of insurance?

The good news is riot insurance isn’t different or separate from other types of business insurance. Your policy might already include the coverage you need in the premiums you’re paying.

Suppose you have the coverages in place that most small businesses already do, including commercial property and business income insurance. In that case, it’s likely you already have the basics to cover instances of civil unrest.

However, as mentioned above, you do want to review your business insurance policy to make sure you have a sufficient amount of coverage in place if your business’s building, equipment, property, and income are affected by civil unrest.

You’ll also need to review any exclusions to your policy and purchase add-on commercial insurance coverages if needed. Get a quick Business Owner’s Policy quote here.

How might civil unrest affect my business?

Civil unrest can affect your business in a variety of ways. Common concerns around civil unrest for small business owners include:

• Looting of supplies or inventory
• Storefront damage or damage to offices
• Stolen or broken equipment
• Fires and vandalism
• Temporary closures required by local authorities
• Loss of income due to required closures by the local civil authority (such as the fire department or city council)

In the case of our coffee shop example, the business experienced property damage due to a break-in, property theft, and lost income due to a temporary closure. When a small business is in an area affected by rioting, there can be multiple damages or losses as a result.

What insurance coverages should I have in the event of civil unrest?

There are a few essential insurance coverages that you need in place for your small business at all times, including times of civil unrest.

Commercial property insurance

Commercial property insurance is a bundle of two different coverages: business property insurance and business personal property insurance.

• Business property insurance covers your building if it experiences serious damages caused by vandalism, fire, and more. This coverage will pay for that damaged property’s reconstruction or replacement costs (as long as the damage wasn’t due to natural disasters, such as an earthquake, flood, or another excluded reason).
• Business personal property insurance covers the business property and equipment inside your building, such as computers, inventory, and furniture.

Business interruption insurance

Business interruption insurance, also called business income insurance, can provide financial help to your business if you ever have to close temporarily because of a covered event.

It pays out for lost income, taxes, and payroll. Essentially, it helps your small business pay the bills until you can reopen.

Business Owner’s Policy (BOP)

A Business Owner’s Policy (BOP) is a packaged policy for small business owners that will protect your business from multiple kinds of liability and property damage. It usually includes the coverages discussed above (commercial property and business interruption insurance).

Depending on the specific needs of your business, you can add additional coverages to this policy bundle.

And it’s important to note that some businesses, like restaurants or businesses located in buildings with certain types of windows, may need additional coverage in place to cover riot damages based on their unique needs.

Here’s how small business insurance coverages work together during times of civil commotion

Let’s circle back to the coffee shop example above. Remember, the shop experienced a break-in, looting, and a temporary shutdown due to civil unrest.

In this case, business property and business personal property coverages can help replace looted items and repair the damaged building. In contrast, business interruption coverage can help pay the bills (and employees) during a temporary closure. And due to the nature of the food business, let’s say a restaurant endorsement was already purchased as part of the BOP and covered any spoilage of food.

So in this example of the coffee shop, “riot insurance” was available within the standard BOP.

Make sure your business has the right coverage with Huckleberry

At Huckleberry, we understand that having the right business insurance coverage in place provides peace of mind that allows you to focus on growing your business, caring for your community, and serving your customers.

With Huckleberry, you can get affordable, full-scale coverage for your business. To see what you’d pay in coverage and how much you could save on deductibles and overall rates, get a quick, easy business insurance quote in 5 minutes or less.