Insurance Coverage Claims for Theft, Vandalism and Curfews

Many U.S. businesses face income losses from theft, vandalism and resulting curfew orders, which have affected numerous cities in recent days.

Commercial property insurance policies may provide coverage for these losses, which are and should be treated as a separate claim from pandemic-related losses. Property policies cover physical damage to property and, usually, also provide coverage for business interruption losses if certain conditions are met. Whatever position insurers may take on contamination from COVID-19, they cannot plausibly contest that shattered windows, broken fixtures and stolen merchandise are physical loss or damage. And, while insurance policies vary, typically there is business interruption coverage for “Civil Authority” orders, such as curfews requiring businesses to close. Nearly always, such coverage requires the existence of property damage within some limited geographic radius surrounding the policyholder’s location. This often ranges from one to 10 miles. So if your business is closed by a curfew order and, for example, a building down the block had its windows shattered by thrown bricks, or worse, there is every reason to submit a claim. Bear in mind that, depending on the wording of your policy, the trigger for Civil Authority coverage may not be limited to damage to buildings: it may apply to property within buildings and property in the street, potentially including vandalized vehicles. Think outside the box (store).

Often, Civil Authority coverage has a “waiting period,” providing some period of time that does not count toward the loss. Where provided, waiting periods tend to be 24-72 hours. So if your business closed Saturday in response to a curfew, you may not be able to recover on losses based on Saturday’s lost sales under Civil Authority coverage.

There are steps that companies need to take now to recover such curfew or other riot-related losses.

For businesses that have suffered fire damage and other vandalism:

• Immediately notify your broker to submit a claim, or notify your property insurer of the damage directly.
• Take pictures of the damage.
• Do what you reasonably can to prevent the damage from getting worse.

For businesses shut down by curfews:

• Immediately notify your broker to submit a claim, or notify your property insurer of the closure directly.
• Comply with the law and stay safe.
• Determine whether nearby property was damaged, remembering that coverage under your policy may be triggered by damage within several miles.
• Document the nearby damage—take pictures and keep track of locations.

Your property insurer is going to ask for evidence of damage triggering coverage, so it’s prudent to gather the information now while it is available, particularly for Civil Authority coverage where you do not have control over the damages location(s).

Remember that even if you have received a denial of coverage for pandemic-related losses, your claims for losses relating to theft, vandalism or curfew orders is a separate claim with separate coverage triggers. If you are experiencing losses, submit your claim and work with experienced insurance professionals to maximize your coverage for those losses.