Is Your Property Insured Against a Riot?

The current unrest facing the St. Louis metropolitan region carries with it the elevated risk of damage and/or destruction of both real and personal property. While everyone intends and hopes their insurance policies cover all eventualities that may arise, the truth of the matter is that not all eventualities are covered by insurance.

Unfortunately, it is generally only after something truly unexpected happens that policies are reviewed and tested for actual coverage. At that moment, it may be too late to both prepare for the event and/or adjust coverage.

As a result, it may be wise now to pull out your current auto, homeowners, renters, commercial or other similar policies to review each policy’s specific language.

One of the coverage limitations to consider are so-called “force majeure” clauses. “Force majeure” is a contractual term that relieves parties from performing their contractual obligations when certain circumstances beyond their control arise, often making their performance under the contract impractical or impossible. Examples of these circumstances can include earthquakes, war, strikes, epidemics, acts of God, and riots.

The extent and applicability of these circumstances are generally specifically described in the insurance policy; however, the coverage question is complicated to the extent these events are not defined. If the events are defined, those definitions will control. Otherwise, insurers, as well as the courts, will look to commonly-understood definitions of the terms for assistance in defining the extent of coverage (which may further complicate matters). For instance, Merriam Webster defines a riot as a “situation in which a large group of people behave in a violent and uncontrolled way” whereas Missouri Statute 574.050 R.S.Mo. defines the crime of rioting as the knowing assembly of seven or more persons in agreement to violate any of the criminal laws of Missouri or the United States with force or violence and while so assembled, does violate said laws with force or violence. As the two examples demonstrate, the definition can vary widely and may be susceptible to multiple, competing arguments regarding the same.

The moral of the story is to review your policies – now, before things occur.

The first thing to do is to talk with your insurance professional. If there are still questions about wording, a consultation with an attorney and the insurance professional may be advisable.

A little time, effort, and maybe even money spent now could be a wise investment if problems occur as this knowledge may then assist you in taking the necessary preparations to protect against a potential uncovered risk.