Will insurance cover businesses damaged by looting? It depends

Sam Dean, Laurence Darmiento and Ronald D. White, Los Angeles Times on

Published in Business News

LOS ANGELES -- Sean Wotherspoon spent Saturday night in his Los Angeles home, watching live as his businesses were destroyed.

He watched as security-camera feeds showed people shattering the plate glass windows of his Round Two store o and walking out with more than $250,000 worth of high-end street wear. He saw them make off with about as much inventory from his vintage store next door. He watched as the Round Two location on the other side of the country in Richmond, Va., was hollowed out by fire.

"I've been robbed before, but nothing like this," Wotherspoon said.

Protests over the police killing in Minneapolis of George Floyd continued in cities across the country Sunday night, and thousands took to the streets to voice their outrage at the apparent impunity of police who kill or brutalize black Americans.

Looting has accompanied some of the protests. Among the first businesses to be burglarized was a Minneapolis Target near the police precinct of officer Derek Chauvin, who has been charged with third-degree murder and manslaughter after killing Floyd by kneeling on his neck as he struggled for breath. In the days since, national chains and local businesses have been burglarized, including some in downtown Los Angeles, the Fairfax district, Beverly Hills and Santa Monica's beachfront commercial zone.

Many businesses were already struggling with slashed revenue and dismal earning prospects under the continuing COVID-19 pandemic.


But how and whether they bounce back from shattered windows, stolen merchandise and burned-out buildings hinges on one factor: their insurance policies.

As Wotherspoon spent his Sunday assessing the losses to his stores, he admitted that he wasn't exactly sure whether his policy would protect him from these kinds of damages.

"We are insured, but I don't know what we are covered for, and I don't know whether we are covered for losses" in a civil disturbance, he said. "We may not know for a week or so."

Business insurance is similar to consumer car insurance: Basic liability is required by many landlords (though not all) in a lease agreement, protecting proprietors in the event that they face lawsuits from customers who are injured in their stores, among other legal claims. But it may be up to the individual business owners to decide how much insurance they want to buy to cover their inventory and equipment in case of theft, fire and other scenarios.


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