US businesses splurge on insurance to protect against post-election chaos

WASHINGTON: Retailers, pharmacies and other merchants across the United States are gobbling up insurance that protects buildings from damage caused by societal unrest, worried about possible street violence after the US presidential election, insurers and brokers said.
Many shops and offices are facing double-digit premium hikes for such policies but buying them anyway because the cost of not doing so might be higher, industry sources said.
Memories of smashed windows, stolen merchandise and stores set ablaze is fresh in the minds of business owners in major US cities including New York, Los Angeles and Portland, where aggressors damaged buildings under the cover of peaceful demonstrations sparked by the May 25 police killing of George Floyd, a Black man.
On Chicago’s Magnificent Mile, for instance, stores like Gucci, H&M and Nordstrom are open but remain clad in plywood, having being looted months ago.
It is not clear what will happen after the November 3 election, but incumbent Republican President Donald Trump has not committed to a peaceful transition of power if he loses. Trump is behind in polls against Democrat Joe Biden, and has support from pro-gun, white power and militant groups.
“I think it’s not a question of if. It’s a question of the magnitude of these violent protests,” said Björn Reusswig, who heads the global and political violence coverage practice for an Allianz SE specialty insurance unit.
Sales of commercial policies that cover damage from societal unrest in the United States have already doubled in October from September levels, insurers and brokers said.
That is partly because some providers, mainly in the Lloyd’s of London marketplace, stopped including “strikes, riots and civil commotion” coverage within general property policies for businesses such as retailers and pharmacies that were already hard-hit by civil commotion, forcing them to buy separate insurance, said a person familiar with the matter, who was not authorised to speak to the media.
Civil unrest hit global insurers’ results during the second quarter. Zurich Insurance reported $122 million in civil unrest losses, mainly from the United States, while American International Group Inc posted $126 million in such losses and the Travelers Companies Inc $91 million.
Civil commotion has long been covered by standard property insurance in the United States, where destruction from protests is unusual, sources said. — Reuters