Covering Looting Losses

There has been unrest in cities across the country as people protest the killing of George Floyd by Minneapolis police last week, with protests turning into riots at times. These protests come when businesses are economically vulnerable as a result of Covid-19, and while large businesses tend to have comprehensive coverage which would include losses from looting and vandalism, many small and mid-size business owners will be wondering how to recover as Pennsylvania moves towards re-opening businesses that have been closed due to the virus. Business owners’ abilities to recover will largely depend on the insurance coverage available to them through their policies.

There are various types of commercial insurance policies, each covering the separate risks facing a business. A Commercial General Liability Policy, for example, covers insured business owners against injuries or property damage to third parties, but does not generally cover property damage on the business’s property itself. Rather, claims arising from looting and vandalism would generally be covered under a commercial property insurance policy. Some small and mid-sized businesses have a business owner’s policy (BOP), which combines liability coverage, property coverage, and business interruption coverage into one plan.

Commercial Property Insurance Coverage

Fortunately, most property insurance policies, whether independent or part of a BOP, cover the sort of vandalism and looting experienced in Pennsylvania this past week.  However, policies often have different coverage options from which a business owner can select the amount of coverage to purchase, and the amount recoverable may be capped depending upon the specific policy held by the insured. It is also possible that coverage is arranged within the lease between a business owner and his landlord, in which case the business owner must inquire about his landlord’s policy coverage.

“All-Risk” Insurance Policies

An additional option for business owners is an “all-risk” insurance policy,  which includes all losses occurring as a result of an unplanned or unintentional event. While subject to specific exceptions such as earthquakes, looting would generally be included in the coverage under such an all-risk policy.

Next Steps

As businesses search for support as they recover and rebuild from recent looting, they should look to their insurance policies to determine what level of coverage they have and what caps, if any, exist on the amount they can recover. Look for language discussing coverage of damage arising from “civil disturbances”, “civil commotion”, and “vandalism and malicious mischief”. It is also important to take pictures of damage and to retain any police reports and any records of looting and theft. If you wish to have your policy reviewed to ensure that you have received what you are entitled to, or if you have been denied coverage when you believe you should be covered, the insurance attorneys at Freundlich and Littman, LLC would be happy to discuss your options. Call us today at 215-545-8500 or email at info@freundlichandlittman.com to schedule a free consultation.

Sources

Ken Brownlee, Liability Insurance for Disasters Triggered by Human Activities, Cat. Claims: Insurance Covers for Natural and Man Made Disasters §12:35, May 2020.

Nydia Han and Heather Grubola, Tips for small businesses in Philadelphia suffering from looting damage, June 1, 2020, https://6abc.com/society/tips-for-small-businesses-suffering-from-looting-damage/6225243/.

“What does a business owners policy (BOP) cover?”, Insurance Information Institute, 2020 https://www.iii.org/article/what-does-businessowners-policy-bop-cover.

Tammy Hinshaw, Summ. Pa. Jur. 2d Insurance, 14 PAJUR Insurance §15:27, §§15:37-38, April 2020.

Intentional Damage vs Unintentional Damage

Intentional Damage

Intentional damage to your property has different consequences than accidents. Intentional damage includes acts of vandalism. In cases of intentional damage, the action is criminal. You need to contact the police. They will file a report and complete an investigation into the issue.

After calling the police, it is a good idea to contact legal representation. The police may not find who caused your property damage. Likewise, the damage may result from a few rowdy teenagers who drank too much while away for Senior Week. In this instance, you may be able to collect money from the teenagers and their parents for the damage to your property. Seek legal advice before contacting families and demanding money.

Unintentional Damage

Sometimes, property damage is not the result of intentional acts. Too often, a natural disaster or an Act of God will cause serious damage to your property. Your property includes your cars and another physical property you own. You are not required by Pennsylvania law to insure certain pieces of personal property, but it is advisable in order to mitigate financial loss.

Some personal property may need property insurance by order of the bank. If your home or other property is under a mortgage, the bank may require insurance to cover their financial interest in the property.

After the Damage

Certain instances of property damage may not involve the insurance companies. Sometimes, it is a matter of seeking legal counsel to file a cease and desist letter. For instance, neighbors often cause property damage along property lines. To avoid further damage, it may be necessary to take legal action that does not necessarily involve the insurance company.

Other times, the insurance company involves themselves heavily in the process. When dealing with the insurance company, it is equally as necessary to seek legal counsel. In fact, insurance companies have more legal weight. Independent legal representation is more important here.

After obtaining legal representation, your next step is to take pictures of your property damage. Your property damage attorney may even require your to preserve further evidence for an impending legal action.

The Insurance Company

Your next step is to file an insurance claim. Make sure to file your property damage claim with the appropriate insurance company. For instance, if your car malfunctioned and slammed into your home, you need to contact the right insurance company. Your legal counsel will guide you to the right insurance company.

Once the insurance company completes their internal process, you will either receive an offer for payment or an outright denial. You do not have to settle for either of these options. You have legal options beyond taking the insurance company on their word. Contact legal advice first before agreeing or denying any insurance benefits.

If anyone is bullying you into accepting a payment, cease contact with the representative and call your property damage lawyer immediately. Even if the offer comes from your neighbor and not an insurance, you do not have to accept it.