Will Shop Insurance Provide Coverage in Case of Loss or Damage Caused due to Riots?

Businesses are always exposed to a multitude of threats. From natural disasters to vandalism and civil unrest, these unforeseen events can cause significant financial losses. Shop insurance serves as a crucial shield, protecting businesses against various perils, including the often-overlooked threats like RSMD (riots, strikes, malicious damage). This article delves into the intricacies of how shop insurance provides coverage in case of loss or damage caused due to riots.

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Understanding Riot Coverage in Shop Insurance

Typical shop insurance policies often encompass a range of "named perils," which are specific events covered by the insurance. Malicious acts, riot, and strike cover falling under this category, acts as a financial safety net in the aftermath of civil unrest.

While riot coverage offers valuable protection, it's crucial to recognize that the scope of coverage can vary depending on several factors:

  • Policy Terms: Carefully review your policy to understand the precise definition of "riot" used by your insurer. This definition will determine what events qualify for coverage under the riot clause.
  • Exclusions: Some policies might exclude coverage for specific types of civil unrest. It's vital to be aware of any exclusions to avoid coverage gaps.
  • Geographic Location: Areas with a higher historical incidence of riots might have limitations on riot coverage or require additional premiums to reflect the increased risk.

When a riot unfortunately strikes, riot coverage within your shop insurance policy can typically help you recoup losses associated with:

  • Property Damage: This covers damage to your shop's physical structure, such as broken windows, damaged doors, etc.
  • Inventory Loss: If your inventory is stolen, looted, or destroyed during a riot, riot coverage can help compensate you for the financial loss.
  • Replacement Costs: In some cases, riot coverage might extend to cover the replacement of damaged furniture, equipment, or other shop contents.

Assessing Policy Coverage and Limitations

Shop insurance policies vary significantly in the extent of riot coverage they offer. Be aware of potential exclusions that can limit coverage. These might exclude damages caused by peaceful protests, war, wear and tear, etc.

Several clauses and conditions within your shop insurance policy can significantly impact your claim eligibility and payout amount in the event of riot damage:

  • Deductibles: You'll likely have a deductible, a fixed amount you need to pay before the insurance company steps in. A higher deductible can reduce your payout but also lowers your premium.
  • Coverage Limits: Policies often have specific coverage limits for different types of losses. Understanding these limits helps determine if your coverage is adequate to fully recover from a riot.
  • Duty to Mitigate Loss: Your policy might require you to take reasonable steps to minimise losses during a riot. This could involve securing your shop, contacting authorities, or taking steps to salvage damaged inventory. Failure to fulfill this duty might jeopardise your claim.

While purchasing a policy, carefully review your policy wording, paying close attention to definitions, exclusions, and coverage limitations. Don't hesitate to ask questions or seek clarification from your insurance agent regarding any ambiguities in your policy.

Impact of Civil Unrest on Insurance Claims

The aftermath of civil unrest can be a stressful and confusing time for businesses grappling with damage and lost revenue. While shop insurance with riot coverage offers a safety net, processing and settling claims related to riots can be a complex process.

Delays and Complexities in Claims Processing

  • Increased Volume of Claims: A widespread riot can lead to a surge of claims from businesses within the affected area. This can overwhelm insurance companies, potentially causing delays in processing individual claims.
  • Verification and Investigation: Insurers meticulously evaluate claims to determine if the damage falls under the purview of the policy's riot coverage. This may involve sending adjusters to assess the damage, reviewing police reports, and verifying the cause of the loss.
  • Documentation Challenges: In the chaotic aftermath of a riot, gathering necessary documentation like security footage, damage estimates, and police reports can be challenging for business owners. Incomplete or missing documentation can further delay the claims process.

When filing a riot damage claim, understanding what insurers require for a successful claim is crucial.

  • Evidence: Provide documentation proving your shop was damaged during a riot, not another event. Police reports, news articles, and witness testimonies can be helpful here.
  • Detailed Damage Inventory: Compile a detailed inventory of all damaged property and lost inventory, including photos, receipts, and valuations. This helps the insurer accurately assess the extent of the loss.
  • Proof of Ownership: Be prepared to furnish documents proving ownership of the damaged property and inventory (e.g., purchase receipts, invoices).
  • Security Measures: Some policies might require demonstrating you took reasonable steps to secure your shop before and during the riot (e.g., alarm systems, security cameras).

Example of Complexities of Filing Insurance Claims in the Aftermath of Civil Disturbances

After a violent riot in New Delhi, a local clothing retailer suffered significant property damage and inventory losses totaling ₹70 lakh. The insurance claim process became fraught with complexities due to the store's extensive damages, which included destroyed CCTV systems, and documentation such as invoices and receipts, complicating proof of loss verification.

Luckily the shop owner had online copies of important documents available, which he submitted along with the claim form. With the insurance company overwhelmed by claims from the area, there were substantial delays. Adjusters faced delays in assessing the site due to safety concerns amidst ongoing disturbances. But ultimately, after much waiting, the retailer finally received a complete settlement.

Mitigating Risks and Enhancing Coverage: Proactive Strategies

The first line of defence is to physically secure your shop. Installing robust security measures such as alarm systems, well-lit security cameras, and sturdy doors with deadbolts deters potential looters and vandals. Beyond physical security, developing a comprehensive emergency response plan is crucial.

Additionally, maintaining proper documentation for all shop property, including purchase receipts, appraisals, and maintenance records, helps the insurance company determine the value of damaged property. Storing digital backups of crucial documents, such as policy documents, inventory records, and property documentation, in a secure cloud storage system ensures easy access even in the event of physical damage to your shop.

Expanding Your Coverage: Exploring Additional Options

While many shop insurance policies include basic riot coverage, consider exploring additional options for a more comprehensive safety net:

  • Terrorism: This add-on expands your coverage to include losses caused by acts of terrorism.
  • Escalation: This covers damage due to peaceful protests that escalate into violence or riots.
  • Earthquake: This protects you from losses caused by earthquakes, a hazard often excluded from standard coverage.

Regulatory and Legal Considerations

Unlike some countries, riot insurance in India isn't mandatory. Under special circumstances, the Indian government might offer support to riot-affected businesses through state relief programs or central government packages. Research these options for potential financial aid or tax relief. And for legal complexities, consult an insurance lawyer, especially regarding policy coverage disputes.


While shop insurance with riot coverage offers a valuable safety net, understanding the limitations and potential gaps in your policy is crucial. Proactive measures like strengthening security and maintaining meticulous records can significantly improve your preparedness. Remember, a comprehensive insurance plan and clear communication with your insurer are vital for navigating the claims process effectively. To ensure your business has the right protection against unforeseen events like riots, visit Policybazaar.com and talk to an expert who can help you review your coverage and explore additional options to mitigate financial risks.

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