Is Your Shop and Insurance Coverage Prepared for A Riot? by Gary Ledoux
We have all heard about the rioting going on across the country. For months, at least a dozen cities experienced businesses being burned, looted and extensively damaged. Government instituted curfews closed off whole sections of cities and shortened business hours causing businesses to lose income. It’s unnerving for everyone. Fortunately, it would appear collision shops have dodged the bullet, so far. Industry leader Brandon Eckenrode, of the Collision Industry Foundation, indicated no shops have requested financial help from the organization due to riot damage.
Any business owner can’t help but wonder if the mayhem will stop, or if it will expand into their area of the city. This must be especially perplexing for body shop owners who, besides worrying about their own property and equipment, are entrusted with customers’ vehicles, which must not only be repaired, but kept safe in the meantime. To find out how collision shop owners can help protect themselves if faced with civil unrest, we contacted several insurance company representatives to ask their advice. Generally speaking, they were very helpful and we are grateful for their contribution, but they preferred not to have their name or company mentioned publicly. Here are some of their major points: Coverage for Civil Commotion The riot (civil commotion) insurance coverage you may have, or may not have, is predicated on the state in which you operate your business, the
insurance carrier and how your policy is written. Check with your own insurance agent and see exactly what is covered, and, equally important, what is excluded. One representative noted, “In general terms, basic property insurance won’t be enough, but the shop owner can purchase a business operations policy and a garage keepers policy, which would usually extend coverage for damage done by rioting, fire and civil commotion.” Having Enough Coverage When talking with your insurance agent, consider not only what is covered (building, contents, equipment, company vehicles, customer cars) but also the amount of coverage in terms of dollar amount. One insurance representative noted it is not uncommon for small business owners to request the barest minimum of insurance coverage; for example, just enough to meet a standard set by the local municipality so they can get their business license or meet some other prerequisite. Business Interruption Business interruption coverage can be rather complex and beyond the scope of this article. This coverage can include loss of business hours due to official curfews and complete closure of the business due to riot damage. Policies may require a waiting period of 72 hours before claims can be made, and may be limited to a certain number of weeks of closure. Documentation of all facets of the loss are critical. Damage Mitigation Shop owners should take reasonable steps to minimize damages. This may mean boarding up windows or moving customers’ cars to another safer location. The cost of such actions, such as hiring people to board up shop windows or move cars to another location, may be reimbursable under the insurance policy, or not. Shop owners need to check with their agents.
Vehicle Accesories If you are working on accessorized vehicles, especially those with expensive items like high-end stereo equipment, custom tires and wheels, or light bars and lift kits, check with the vehicle owner to see if their insurance will cover those items if they are lost due to civil commotion. Chances are, the shop’s insurance will only cover standard accessories that came with the vehicle from the vehicle manufacturer and not something that was added after the fact. The vehicle owner’s insurance may only do the same unless they purchased some sort of rider policy. Building and Rubble Removal If your building becomes a total loss, you may be required under a city ordinance to remove the rubble of your building. It may sound morbid, but, before this becomes necessary, check to see how much it would ordinarily cost to remove and dispose of a building of your size. If your building is wrecked, chances are many
others are as well. Building removal experts may see this as an opportunity to charge premium rates. Make sure you have enough coverage. Terrorists and Vandals So far, those committing the many acts of civil commotion have been largely deemed “protesters.” However, insurers may assert they are not protesters, but terrorists, and thereby the damage is not covered. Also, if your building is left unattended for a certain amount of time, your insurer may invoke a vacancy exclusion deeming damage inflicted by vandals rather than rioters, which may not be covered. Again, and this cannot be stressed enough, check with your own agent to see if you have the correct coverage, in large enough amounts.
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