Ferguson Inspired Riots Raise Questions about Commercial Insurance Coverage for Civil Unrest

Business owners around the country watching the rioting and property destruction in Ferguson may be scouring their business insurance policy to determine their coverage against this type of unlawful violent conduct.  Since the grand jury decision not to indict police officer Darren Wilson in the shooting of Michael Brown, looting and rioting have broken out in major cities across the U.S.  Small business owners who have seen their stores, inventory and equipment damaged by fire, theft and vandalism might be able to rely on their business coverage to facilitate their financial recovery.

Both homeowner and commercial coverage typically contain civil commotion and riot coverage.  This coverage can provide compensation for damage or direct physical loss of property caused by civil unrest like that seen in cities following the grand jury decision in the Michael Brown case. 

The Mississippi Supreme Court has specified four elements that must be present to establish the existence of a riot or civil commotion that is covered under an insurance policy.  These elements include: (1) an unlawful assembly or a lawful assembly that engages in unlawful conduct; (2) violent acts; (3) intent to mutually assist against lawful authority; and (4) some level of public terror.  The court also indicated that the term “lawful authority” is not limited to official law enforcement authorities but also includes those whose rights might be injured.  Black law dictionary also provides the following definition of “riot”:

  • An assemblage of three or more persons in a public place taking concerted action in a turbulent and disorderly manner for a common purpose.
  • An unlawful disturbance of the peace by an assemblage of usually three or more persons acting with a common purpose in a violent or tumultuous manner that threatens or terrorizes the public or an institution.

Because courts have defined the terms “riot” and “civil commotion” differently, business owners should review their policy to identify coverage caused by damage caused by looting, vandalism or fire.  If your business has been damaged in a riot or by other types of criminal conduct, you might have a right to have damage to the physical structure of your business, business equipment, inventory and other items rebuilt or replaced.  If your business must be temporarily closed because of the damage, there are other critical types of loss for which you might seek compensation.  Some of these other types of compensation include:

  • Loss profits
  • Costs associated with temporarily relocating your business
  • Damaged or destroyed inventory
  • Business interruption
  • Temporary lower profits as the business gets back up to speed after rebuilding
  • Law and ordinance coverage

This is not a comprehensive list of all types of loss that might be covered by your commercial policy nor do all such policies cover all of the forms of loss described above.  If you have questions about your coverage or you need to file a claim, you should contact your insurance carrier.  If you do not feel like you are getting accurate answers or your claim is not being handled in a timely and appropriate manner, our Miami insurance claims law firm might be able to help.

If you are in the middle of a commercial claims dispute with your insurance company, you are welcome to contact my Florida insurance claims dispute law firm.  My law firm represents policyholders in claims disputes in Miami and throughout Florida.  The Law Firm of J.P. Gonzalez-Sirgo, P.A. offers free consultations and case evaluations.  No Recovery, No Lawyer Fees.  Call 305-461-1095 or Toll Free 1-866-71-CLAIM.

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