In the wake of the latest series of civil disturbances in American cities, urban enterprises are likely to see higher prices and higher deductibles for property insurance. Also, insurers will be inclined to mandate loss control measures that would have been merely recommended in the past. These could include “warranties” regarding the installation of exterior lighting, use of security cameras, installation of safety glass, securing of valuable items of property, and other measures. Broken Windows Urban enterprise operators need to be aware of two property insurance details that could determine what they recover in the event of a vandalism or riot loss. First, does your policy cover broken windows? Probably, but perhaps not. In the late 1900s insurers regularly excluded property coverage for the breaking of building glass. The PAGE 2 Riots, Vandalism and Insurance Continued reasoning was that windows were broken and replaced much more easily than other building components, so maintaining them was just a cost of doing business. That treatment began to change in 2000 when the Insurance Services Office (ISO), which develops the standardized policy forms used by many insurers, released a new version of its commercial property policy that removed the exclusion for building glass. It takes several years for insurers to adopt new versions of standardized forms, so while most commercial property forms today cover building glass, not all of them do. That’s not a reason to reject a policy that otherwise meets your needs at a good price, but you should know what you’re buying. If your property policy does not cover building glass, you can request that it be added by endorsement — or purchase a separate glass coverage policy, which is still offered by some insurers. Theft and Looting A second important detail concerns the distinction between theft and “looting.” ISO’s named perils coverage for “riot or civil commotion” explicitly includes coverage for “looting occurring at the time and place of riot and civil commotion.” In its description of coverage for vandalism, ISO states that “we (the insurance company) will not pay for loss or damage caused by theft, except for building damage caused by the breaking in or exiting of burglars.” The distinction between “looting” (generally covered) and “theft” (often not covered) means that a commercial PROTECTING YOUR PROPERTY ® 800.426.0677 | aipnw.com Sheila E. Salvatore, Editor | Editor@AdjustersInternational.com Copyright © 2021 Adjusters International, Ltd. All Rights Reserved. E04-1023 Insights for Your Industry® is published as a public service by Adjusters International, Ltd. It is provided for general information and is not intended to replace professional insurance, legal and/or financial advice for specific cases.
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