Who Should Recoup Businesses After A Riot?
- Profit
- Jun 18
- 3 min read
Updated: Jun 18
Businesses Should Not Bear A Burden They Didn't Cause
Mona’s life savings hang in the balance since her pottery shop was burned to the ground and looted during a recent political riot. Mona fears the unplanned expenses could threaten her shop’s continued existence.
Marcel, a nearby protestor (not a rioter) sees Mona in tears, and tries to comfort her, “Don’t worry. Insurance will repay you for all your losses. In fact, your store will ultimately benefit from getting destroyed because you can build back better.” Mona wipes her tears in relief.
Marcel asks, “I can explain this further over dinner. What’s your number, bae?”
If Mona is dumb enough to believe Marcel, they will end up as the perfect couple!
Though insurance covers many small businesses in such cases, the picture is not as clear cut or as rosy as Marcel might think.
Reality Check # 1: All Business Insurance Covers Riot Damage Automatically
Many small business owners believe that their general liability insurance automatically covers damages from riots. In reality, coverage often depends on the specific policy and may require additional add-on coverage (Ex: higher monthly premiums) or specific riders for civil unrest. Not to mention, insurance rates in riot-affected areas spike the premiums for the whole zip code.
Reality Check # 2: Filing a Claim is a Quick and Simple Process
Some think that once they file an insurance claim for riot damage, the payout will come swiftly and easily. However, the claims process can be lengthy and complicated, often involving extensive documentation, while negotiations with the insurer to recoup your entire losses is not a guaranteed slam dunk.
Reality Check # 3: Insurers Will Pay Full Replacement Costs
There's a misconception that insurance companies will cover the full costs of repairs or replacements for riot-related damage. In many cases, policies may have limits, deductibles, or specific exclusions that can significantly reduce the amount received.
In short, insurance companies, like Las Vegas casinos, always have the upper hand. Remember, when a Claims Adjuster is sent out, they are NOT there so you can get a windfall at their employer’s expense.
The Claims Adjuster is there to save the insurance company money by poking holes in your claim , trying to figure out if your negligence or malfeasance contributed to your loss, and deducting accordingly!
Why Should The Victim Pay For The Crime Committed Against Them?
In a perfect world…the apprehended rioter…should pay back the damage he or she caused the business as the “restitution part” of their sentence.
In reality, few convicted rioters have the funds to pay back the businesses they destroy. In fact, depending on the extent of the damage caused, it could take multiple lifetimes pay back such a debt!
If the Rioter and/or The Insurance Company Can’t Make A Business Whole, Who Can AND Should?
The local city government. That’s who!
Due to the municipality’s neglection of their law enforcement protection duties, the local city government should not collect taxes (or at least should provide a "riot tax credit") for the calendar year in which the business suffered losses during a riot.
Moreover, if the gap between insurance coverage and riot damage is very extensive, this tax credit can be extended multiple years, until the business is recompensed in full.
Conclusion - The Buck Stops With City Government Maybe, if city municipalities are held financially responsible for their poor, inadequate, and lacking responses to riots - they may be less likely to be feckless in their future responses when cities burn and are plundered on their watch!
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