Page 28 - FDCC Insights Spring 2022

involving either violence or the threat of violence. To constitute a “civil commotion,” most states require a prolonged disturbance of civil order such as widespread acts of looting. Some of the protests that occurred during the summer of 2020 likely satisfied the definition of either “riot” or “civil commotion” under the law of the states in which they occurred. However, if the insured properties damaged in such riots were not being used for customary business operations, coverage may be precluded by a vacancy exclusion or an occupancy requirement.
Business losses sustained as a result of curfew orders enacted for the purpose of preventing future riots do not trigger coverage under the civil authority provisions contained in most commercial property policies because, in most jurisdictions, such orders are not considered to result from actual physical loss or damage to property. Furthermore, the curfew orders generally did not completely prohibit access to insured properties. Whether coverage for such losses would also be precluded by a civil authority exclusion is currently undetermined.
When multiple instances of property damage to an insured property result from a single riot, most jurisdictions would consider such damage to constitute a single “occurrence” for purposes of the deductible amount and the liability limits of the applicable policy. However, if the instances of property damage result from separate riots, or from acts that do not qualify as riots, they may implicate separate “occurrences.”
If property damage that occurred during the riots was caused by a combination of covered and excluded perils, such as vandalism and fire, most jurisdictions identify the efficient proximate cause of the loss as the primary cause for purposes of coverage. A minority of jurisdictions, however, afford coverage whenever a covered peril contributed to the loss, even if it was not the primary cause.
While these rules are typical of most commercial property insurance policies and most jurisdictions, the existence and scope of coverage for any given loss will depend on the language of the particular policy provisions governing the claim at issue and the particular jurisdiction in which the loss occurred.
Alycen Moss is an FDCC Defense Counsel Member and Chair of the Property Insurance Substantive Law Section. She is also Vice Chair of the Global Insurance Department of Cozen O’Connor and Managing partner of its Atlanta, GA Office. Contact her at: amoss@cozen.com. Ms. Moss was assisted in writing this article by Elliot Kerzner who is also with the firm.
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Insights SPRING2021