On Saturday 13 January 2007 the Australian media focused on an ugly riot in Noble Park, Victoria, which arose when police endeavoured to disperse some 1000 bystanders gathered to watch an illegal drag race. Some rioters spilled into a nearby video shop causing extensive damage to property. Although property damage was not as extensive, rioting crowds drew unwanted international media attention to the Australian Tennis Open on Monday 15 January 2007.
Now that calm has returned it is important for business owners to consider whether any property damage caused by riot is covered under their insurance policy.
Larger business owners will have an Industrial Special Risks policy. This is an all risks policy and as the name suggests it covers all risks unless excluded. Many Mark IV Industrial Special Risks policies would appear to cover the Property Damage and any subsequent Business Interruption flowing from the damage caused by riot. A standard Mark IV wording excludes “War Risks” i.e. damage to property “happening through or connected with war, invasion, act of foreign enemy, hostilities (whether war be declared or not), civil war, rebellion, revolution, insurrection, military or usurped power”. Whilst both violent and disappointing the events which occurred in Noble Park and the Australian Tennis Open hardly fall into this category.
Other business owners may have an Insured Peril policy. This is a policy which responds to specified perils. Many of these list “Riot & Civil Commotion” as an Insured Peril which at first glance suggests the damage like that which occurred in Noble Park is covered. However, it is important to read the policy carefully. For example under the heading of “Riot or civil commotion” one policy currently available states “This insured event only includes acts of:
(a) strikers, locked-out workers, persons taking part in labour disturbances and persons of malicious intent acting on behalf of or in connection with any political organisation, but excluding destruction or damage caused by total or partial cessation of work or the retarding or interruption or cessation of any process operation; and
(b) any lawful authority in connection with strike lockout, labour disturbance or political violence.”
The same policy also covers “Malicious acts” but specifically states this does not include loss or damage by persons rioting or participating in civil commotion.
This policy is, therefore, unlikely to respond to the unfortunate events which occurred earlier this week.
It is important to understand the cover offered by insurance policies. Different policies can provide very different results.
Author
Published with permission of Claim Solutions Pty Ltd.
Insurance Policy
Country: - Australia
Policy Description: - Mark IV Industrial Special Risks (ISR) Policy
Insurer: - Various
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