Ferguson, Mo. continues to make national headlines amid high tensions over the unfortunate police shooting of unarmed 18-year old Michael Brown on Aug. 9.

While much of the focus remains on the shooting, the resulting protests and the severity of the police response, business owners in the area have been caught in between, and have seen their stores looted, burned and damaged as anger boils over.

Many firsthand accounts indicate only a few among the protesters have looted stores, or attempted to do so. In fact, it seems many of the protesters have banded together to protect local businesses (A Huffington Post article aggregates on-the-scene tweets here describing the events). And Missouri Governor Jay Nixon, who today ordered the National Guard deployed to Ferguson, has said recent violent criminal acts appear to have been perpetrated, in many cases, by people from outside the community and state.

For affected business owners, though, “how” and “by whom” are questions that may be academic, and they are perhaps more concerned with picking up the pieces and restoring their businesses.

In what may be a welcome bit of news for them, it seems there would likely be coverage to help them get back on their feet, according to insurance experts. Susan Massmann, and FC&S Online editor, says, “The ISO commercial property and businessowners programs generally cover property damage caused by rioting, including looting occurring at the time and place of rioting. I have not seen anything to limit the coverage due to escalation of events,” such as today's action by Nixon calling in the National Guard.

FC&S is a property and casualty information service, and is owned by Summit Professional Networks, which also owns National Underwriter and PC360.

Loretta Worters, Insurance Information Institute vice president, likewise says insurance policies should respond for Ferguson business owners: “Commercial property insurance and homeowners policies generally include coverage for loss caused by 'riot or civil commotion,'” she says. “Typically, property insurance under business owners policies written on a named-peril basis includes coverage for direct physical loss caused by riot or civil commotion, and looting at the time and place of the occurrence.”

Worters adds, “Coverage for damage caused by rioting includes looting by participants who steal merchandise or other property from premises that they have damaged and entered. It also covers fire. Vandalism is also a covered peril in business owners policies.”

So how exactly is a “riot” or “civil commotion” defined for insurance purposes? For a property-insurance policy, Massmann cites four elements identified by the Mississippi Supreme Court in Blackledge v. Omega Ins. Co., 740 So.2d 295 (Miss. 1999):

“(1) unlawful assembly of three or more people (or lawful assembly that, due to its violence and tumult, becomes unlawful), (2) acts of violence and (3) intent to mutually assist against lawful authority. The common law clearly indicates that lawful authority is not limited to official law enforcement, but extends to those whose rights are or may be injured and seek to protect those rights. In addition, there must be some degree of (4) public terror.”

(This definition is covered in the FC&S article “Riot or Civil Commotion Coverage.”)

Business owners might have further protections if they had purchased them. For example, Worters says, “Plate-glass-window insurance is an additional coverage that, if [business owners] had it, would cover for any damage done to glass windows.”

She also discusses coverages for businesses, such as a dry cleaner or automotive shop, that may be in temporary possession of someone else's personal property. “There could be other coverages that a specific type of business would need to have that may provide some coverage such as bailee insurance for legal liability resulting from damage or destruction of a bailor's property while temporarily under the care or custody of a bailee,” Worters says.

Business income/interruption coverage may also come into play, but Worters notes it is only triggered if there is physical damage “of such magnitude that the business must suspend its operations.”

She adds, “Most policies have a waiting period of several days before business interruption coverage comes into play. Once it is in play, the coverage is not retroactive to the day of the event.”

Special Reports /

Ferguson is still burning: Here's what business owners, insurers need to know

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