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Understanding property and business interruption coverage during times of unrest

Recent protests and unrest have been accompanied by rioting and looting in many cities. Various insurance policies may respond to property damage and losses.

06/13/2025 · 6 minute read

The protests that began in Los Angeles and led to the mobilization of police forces and National Guard troops and the military are a reminder for organizations to consider the potential insurance coverage implications if businesses in an area affected by unrest are interrupted, if there is damage to insured premises, or even if there is damage to contingent customer or supplier locations.

First and foremost, it is important to take steps to help ensure the safety of employees, customers, or any visitors to your properties. Any steps that can be safely undertaken to secure your properties should also be considered.

Property insurance coverage

Traditional property insurance policies typically require insured physical loss or damage to trigger a response. In the US, many property policies are written on an all-risk basis, typically covering direct physical loss or damage to insured locations unless otherwise excluded. If coverage is provided on a specified named perils basis, a review of covered perils will be necessary to determine whether a specific cause of loss could apply.

Some policies contain potentially relevant exclusions — including those relating to strikes, riots, and civil commotion — introduced in the wake of past prominent cases of unrest. Policyholders and their advisors should review their policies to assess the extent to which this type of exclusion, or others, might apply to locations affected by current events.

Terrorism and political violence coverage

While statements may be made by media or by officials that use terms like riot, terrorism, or political violence, these terms can have specific meanings in both law and insurance policies. Any potential claim notice should simply state the facts of what has happened without speculating as to the presumed motivation of any party. As part of the fact gathering for any claim, insurers can be expected to rely on the information provided to determine any potential coverage implications.

In addition to property insurance policies, some businesses also purchase political violence policies or standalone terrorism policies endorsed with political violence perils such as riots and civil commotion, which may provide coverage for rioting and/or civil commotion. If both property and political violence/standalone terrorism with political violence policies could cover the same loss or damage, there will need to be an assessment about which policy should be primary and respond first based on the facts of the loss and on other insurance provisions in both policies.

Single or multiple occurrences

During unrest events, businesses may suffer multiple losses at a single location, losses at multiple locations in the same city, or even losses in different cities nationwide.

This may raise the question of whether any losses are, collectively, a single “occurrence” or separate, multiple “occurrences.” The answer to this question may affect features of available coverage, including the applicable deductible(s) and any sublimits. Insurers will review their policies’ “occurrence” definitions and the facts and circumstances of any losses to assess the number of occurrences.

Some “occurrence” definitions will have time period limitations — commonly, 72 hours — and may include “riot” and/or “civil commotion.” According to such provisions, another loss occurring within 72 hours (or other stated time period) following a first loss suffered by an insured may be considered part of one occurrence. If losses occur at the same insured location, but at different times — for example, outside of a 72-hour window — or at different locations involving the same insured, insurers may consider such losses to be separate occurrences.

Reasonable expenses

If an insured has sustained loss(es) from ongoing protests and takes measures to protect its property from further damage, noting that some policies do require businesses to safeguard their property, reasonable expenses associated with such actions may be insured under a policy’s protection of property or sue and labor provisions, both of which are extensions sometimes included in property policies. Typically, any expenses associated with either of these provisions are subject to applicable policy deductibles; some conditions may also be subject to sublimits.

Business interruption

Under many property policies, in order for coverage — including any business interruption or other time element coverage — to be triggered, there must be an insured physical loss or damage to property of the type insured under the policy due to a covered cause of loss. Typically, this application of coverage also applies to relevant time element extensions, including interruption by civil authority.

Generally, an insurer will seek to calculate an insured’s actual loss by estimating the period of recovery — the time period from the date of insured physical loss until the property is repaired, replaced, and made ready for normal operations. If, following the date of the damage due to civil unrest, a shutdown order is lifted by the relevant public authority, an insurer will likely take into consideration what the business would have earned had the losses related to civil unrest not occurred during the estimated period of recovery. An insured business, therefore, may be expected to demonstrate what it would have earned during the period of time after the shutdown is lifted even though the business was prevented from operating due to damage relating to the civil unrest.

If access to an insured’s covered locations is prevented by an actual order of civil authority even though the location in question has sustained no physical loss or damage, business interruption and other losses may be insured under a time element extension known as interruption by civil authority. The descriptions and triggers of coverage vary under this type of time element extension, and coverage will depend on several factors, including whether:

  • An insured loss or damage has occurred to property of the type insured under the policy.
  • An insured location is subject to a distance limitation within the extension.
  • Any relevant applicable waiting period has been met.

Policyholders should also note that coverage for the interruption by civil authority is commonly subject to sublimits and/or time limitations.

Responding to potential losses

If you are concerned about potential losses resulting from unrest at a single location or across multiple properties, you should work with your advisors to review applicable policy language and better understand whether and how property and business interruption coverage may be triggered.

If your business suffers a loss, you should follow general guidance on managing losses and preparing claims. Among other actions, you should be sure to collect appropriate loss data and present your claims to your insurers in a prompt and timely manner.

For more information about preparing for and managing unrest risks and losses, contact your Marsh representative.

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