Civil unrest stirred in Ferguson, Missouri, following the police shooting of unarmed 18-year-old Michael Brown on August 9, 2014. Moved to action, residents gathered to protest the tragedy. But as the protest and tensions grew, some local storefronts were collateral damage.
As the world looks on at the news coming out of Ferguson, many business owners wonder what the cost of recovery might be. Does insurance cover damages from civil disturbance? All the broken shop windows, fire damage, and stolen property?
You might be surprised to know that a Business Owner’s Policy does indeed cover these costs. Let’s explore it in more detail.
How a BOP Can Keep Your Business Afloat in Times of Uncertainty
A Business Owner’s Policy is only available to small-business owners who meet certain requirements. It bundles together Property Insurance and General Liability Insurance at an affordable price. Because a BOP protects your business property against loss or damage, it can be written to include coverage for direct physical loss caused by civil unrest, such as theft, broken windows, fire, and vandalism. (Note: some policies need to be written to explicitly include glass window insurance for broken store windows and plate glass windows.)
But what if a protest happens right in front of your business? Police may block off streets, or conditions may be unsafe near or around your workplace. And each day customers can’t walk through your doors is money lost.
It’s a good thing BOPs can also include Business Interruption Insurance, which reimburses you for lost income or extra expenses when a covered event brings your business to a halt. However, business income coverage only kicks in if…
- There is physical damage to the property severe enough that the business must suspend its operations.
- There is physical damage to other property that prevents customers or employees from gaining access to the business.
- There is a curfew or other restrictions in place by civil authorities keeping people away from the area.
Even if these conditions are met, most businesses must wait several days before their Business Interruption coverage can take effect.
Understanding the Fine Details of Your BOP
A Business Owner’s Policy can include many different types of coverage to protect your business, but it’s important to understand what’s included and what’s not. Policies differ depending on the size of your business, location, property, and industry.
For example, your BOP may give you the option of two kinds of Property Insurance:
- A named-perils policy. This only covers losses resulting from specific events named in the policy.
- An all-risk policy. This covers all events except those specifically named in the policy.
It’s difficult to predict risks your small business might face. To help you get prepared, contact an insureon agent for advice on your coverage needs.