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How to Pay for Damages Caused by Civil Unrest

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As nationwide protests against the killing of Black Americans by police engulfed the country this summer, many small businesses found themselves in the crosshairs of conflict. Pockets of looting and destruction left behind shops with smashed windows and damaged merchandise, and owners wondering who would foot the bill.

It's unclear just how extensive the losses are at present. A preliminary estimate from insurance industry analysts as of June 4 put the range of covered losses between $500 million and $900 million. Should things continue at this pace, the cost of this year's incidents of civil unrest could rival that of the Rodney King riots, which occurred April 29 to May 4, 1992, in Los Angeles. That unrest caused $775 million in insured losses, or about $1.4 billion in 2020 dollars, according to Property Claim Services, a unit of Jersey City, New Jersey-based data analytics firm Verisk Analytics.

Even if a protest doesn't turn violent, they can take their toll on U.S. businesses. Case in point: In July, after several nights of protests--which were mostly peaceful--downtown Portland, Oregon, turned into a no-go zone and shop owners preemptively boarded up store windows and doors. The pandemic was also to blame, but abandoned streets didn't help matters.

While riot-inflicted damage to a physical........

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