Over the past several years, riots and civil unrest have caused untold amounts of damages to business owners all over the country. Most businesses have some form of business property insurance. It’s natural to worry about how this kind of insurance coverage can and should apply in the aftermath of civil unrest like violent protests, looting, and rioting.

Business owners must carefully review their business property insurance policies, so they know what to expect when civil unrest damages their business property. An experienced business litigation attorney can help pursue an insurance claim against a business property insurance policy following civil unrest and help their client better understand their available coverage.

What Does Business Property Insurance Cover?

Most types of civil unrest are covered by conventional business property insurance policies. However, it is vital for business owners to carefully scrutinize their insurance policies to determine exactly which civil unrest-related losses qualify for coverage. For example, one insurance policy may cover physical damage to a store or physical business property but only provide minimal coverage for operational losses.

If your business is ever severely damaged by civil unrest, looted, or otherwise rendered unable to conduct your usual operations, your company may suffer more than just property damage to the building itself. A good civil unrest insurance policy should provide coverage for operational losses as well as physical damage to your business property and inventory. If you are forced to relocate your business and incur additional operating expenses due to civil unrest, your policy should provide the coverage you need to account for these expenses. Recently, many business owners have had difficulty obtaining insurance coverage for losses related to the COVID-19 pandemic.

Property Insurance Claims for Civil Unrest Amid COVID-19

The COVID-19 pandemic and other recent events across the United States have spurred many large-scale protests, some of which occurred in areas under lockdown and social distancing policies. While the COVID-19 situation has created many different types of civil unrest over the past year, business owners find that their insurance carriers will not honor their claims due to unmet preconditions of their coverage.

For example, some business owners with insurance policies may think that the civil unrest caused by COVID-19 would be covered only to discover their policy considers physical damage to business property a precondition for claim coverage. This means that since the business owner cannot identify any physical damage, the insurance company considers the criteria for coverage unmet. Legislation is currently unfolding across the US about whether business property insurance should cover damages and operational losses from COVID-19.

How to Handle a Difficult Business Property Insurance Claim

Technicality is the root of most insurance claim disputes; an insurance claim adjuster interprets policy language one way while a claimant and their legal counsel interpret it in a different way. A business property insurance claim for civil unrest can come down to an argument over an interpretation of policy language, and the parties will need to negotiate a fair settlement.

A good attorney should start handling a denied insurance claim by inspecting the policy in question and determining whether the insurance agent handled the issue in good faith. While it is best for an insurance claimant to hire legal representation prior to filing their claim, many business owners who believe their claims are covered will simply file their claims as soon as possible to minimize interruptions and losses to their businesses.

What Is Insurance Bad Faith?

All insurance carriers must handle and process insurance claims in good faith. This means that while they reserve the right to look for any reason they can find to deny or reduce a claim, they must process the claim honestly. An insurance company loses money when they pay out on a claim, so most insurance claim adjusters are trained to look for reasons to deny coverage whenever possible. Unfortunately, this encourages some insurance company agents to act unethically or even illegally.

One of the best ways to avoid insurance bad faith when filing an insurance claim for damages caused by civil unrest is to hire legal representation prior to filing your claim. Your attorney can assist in the drafting of your claim and help you gather required supplemental documentation. If necessary, your attorney can challenge an insurance company’s handling of and/or response to your claim for coverage.

COVID-19 is just one recent situation causing insurance-related problems for business owners. Protests and riots in different parts of the country have financially crippled many businesses who may not know how to approach difficult insurance claims. If your business has recently been damaged in any way by civil unrest, call our firm. It’s essential to speak with an experienced business litigation attorney as soon as possible for assistance with your insurance claim.