Across the country, peaceful protests have called for an end to police brutality. However, some rioters have taken advantage of these peaceful movements, engaging in acts such as vandalism and theft. Businesses facing broken windows or stolen merchandise may now face financial challenges.
Usually after encountering vandalism or theft, you’d turn to your insurance. However, in these circumstances, it may be unclear whether your insurance will cover anything. But if you’ve already had a claim denied, that’s not the end of the road.
You have another option: filing a lawsuit. If you win an insurance lawsuit, that means your insurer will have to pay some or all of what you’re owed. We spoke to Mark Nation, one of the leading insurance recovery attorneys in the country, to get some answers.
Morgan & Morgan: Does a standard insurance policy cover vandalism and physical damage?
Mark Nation: For most policies, the short answer is yes. Most physical damage, stolen merchandise, and often even stolen or damaged personal property of the owners or employees will be covered under standard business insurance policies. As for losses because you were unable to open your business, either due to the area being unsafe or inaccessible, or to the property being too damaged, that should be covered as well.
The triggering language for such losses in most policies is: “The suspension of operations must be caused by physical loss or damage to the insured property, or other damage which prevents you from accessing your property.” This means damage to your property that makes you shut down, or a situation that prevents potential customers from entering or exiting your business, like the area being unsafe or blocked off by law enforcement, crowds, or criminal elements.
M&M: What kind of physical damage to the property would be covered?
MN: For most policies, any kind of physical damage to the building. This includes structural damage, like broken windows, doors, walls, and furniture, and it also includes smoke damage or tear gas contamination. Merchandise ruined by smoke or tear gas would also likely be covered.
M&M: Does the coronavirus crisis affect this in any way?
MN: It shouldn’t have any effect on physical damage coverage, but it may affect a business interruption claim. If your business had already been shut down or unable to operate due to the coronavirus before any rioting occurred, the insurance company may argue that you don’t have any loss of income, because you weren’t making income anyway.
M&M: What reasons would the insurance company use to try to deny claims?
MN: For business interruption claims, most policies do not require them to cover losses incurred during the first 72 hours of suspension of operations. If the entire area your business is in experiences a sustained decrease in foot traffic or commercial activity, your insurer may argue that this constitutes a “decline in economic conditions,” a situation that is also excluded in most policies.
M&M: If a claim is denied, what should business owners do?
MN: Not give up. Remember: every single case we’ve ever won started with a “no” from an insurance company and ended with the policyholder winning some or all of what they were owed. Many claims denials are justified, but many are not. Sometimes claims can be denied because of simple error on the part of the insurance company, and sometimes they are denied based on technicalities and reasoning that don’t hold up under legal scrutiny.
The good news is this: an insurance claim denial isn’t the final word. You can always fight for the coverage you’ve paid premiums for. With a knowledgeable lawyer in your corner, you can take on the insurance company and may be able to recover some if not all of the money you’re entitled to.