The unrest in Charlotte over the death of Keith Scott eased somewhat Sunday, as the city lifted its curfew – but questions for business owners in the wake of the nearly week-long protests remain.
Demonstrations in Charlotte erupted following the death of Scott, a 43-year-old black man, at the hands of police. Events in the altercation with officers remain disputed in spite of released videos, and protesting has involved broken windows, looting of local businesses and altercations with police officers.
Some of the largest employers in the urban center of the city, including Bank of America, Wells Fargo and Duke Energy allowed employees to work from home, and local news reported that a number of uptown Charlotte businesses were damaged or looted during violent protests.
The rioting was so great, Governor Pat McCrory declared a state of emergency and requested the assistance of the National Guard – actions that raise questions on just how personal and commercial insurance
claims filed in the wake of the disaster will be handled.
Fortunately for most victims of the violence, insurance experts believe traditional home, auto and business policies will cover the bulk of their losses.
Damage due to “riots or civil commotion” is generally included in comprehensive auto coverage, homeowners policies and standard business property insurance policies, the Insurance Information Institute said during similar protests in Baltimore last year.
Business interruption coverage, however – which covers lost income – is only triggered when the insured business incurs direct physical damage or the government shuts down an area due to property damage caused by a peril covered by the company’s insurance policy that prevents customers or employees gaining access to the premises.
It seems McCrory’s declaration of emergency will satisfy this requirement, however.
In the event of official declarations of emergency, businesses that haven’t sustained damage – but have lost profits – can file a claim that will be attended to by insurance companies.
However, it is worth noting that even after a covered event, many BI policies have a waiting period of several days before coverage comes into play.
“Even once the business interruption coverage is triggered, it will not be retroactive to the date of the event,” explained Jonathan Reich, an attorney with Womble Carlyle Sandridge & Rice. “In other worlds, for damage caused on Wednesday night, business interruption coverage will not begin until Saturday night. As a result, some losses will not be recoverable under the standard policy.”
Reich advised businesses with claims to take photographs and put their insurers on notice for any claims resulting from the Charlotte protests.
The Charlotte riots are the latest in a public outcry against allegedly brutal police treatment of the black community, sparked by the deaths of Michael Brown in Ferguson, Missouri and Freddie Gray in Baltimore.
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