Days of ongoing protests over police brutality against black people, sparked by the killing of George Floyd in Minneapolis, have led to the tangential concern over the damage of retail storefronts around the country. But legal experts say that’s where premises’ insurance policies should come in.
By the end of the weekend, high-end retail stores including Gucci and Alexander McQueen on Rodeo Drive in Los Angeles were tagged with phrases like “Make America Pay” and “Eat the rich,” and others reflecting a public sentiment against systemic inequality, while boutique stores in New York’s SoHo neighborhood faced their own rampages.
But many of the larger and higher-end retailers are more likely to be covered by strong property insurance policies that can help provide recoveries for breakage and lost items, said Staci Jennifer Riordan, who leads the fashion practice at Nixon Peabody LLP, and is the vice chair of the firm’s litigation department.
“In general, a commercial insurance policy will cover anything that happens in your store, from someone slipping and falling, to merchandise being stolen, and physical damage to the store,” Riordan said.
To the extent there is damage involving objects outside the stores that are part of its premises, including any signage and installations, insurance coverage would depend on contract language, she said.
But most sophisticated retailers with resources are likely to have had that language negotiated into their insurance contracts, she said. Most insurance policies will have some sort of deductible amount, that imposes a threshold amount of damages above which stores can seek insurance. Either the building owner or the company in it, or both, can likely seek damage recoveries, depending on the insurance contracts, Riordan said.
“If your harm is, you have property damage, it seems pretty straightforward that the insurance company would pay,” she said.
Amid the discussion around damage to stores during protests, videos circulating on social media over the weekend showed chaotic and incendiary bouts as police often engaged in violent crackdowns of protesters.
Public discourse around property damage should take place within the context of protests rallying against the history of police brutality against black people, said Deborah Archer, associate professor of clinical law, and co-faculty director of the Center on Race, Inequality and the Law, at the New York University School of Law.
“Those folks who have the most privilege in the world, their damages will be covered,” Archer said. “It really is disheartening that we have a very short-term focus on injustice and systemic violence, and then the conversation shifts very quickly to damage to property.”
Some brand leaders have echoed that message. In an Instagram post on Sunday, Bobby Kim, cofounder of Los Angeles streetwear brand The Hundreds, wrote, “When people ask me why I’m not upset that my business is impacted or my neighborhood is pillaged, I tell them that my disgust over injustices in this country eclipses any other feeling.”
Smaller stores may have a harder time seeking insurance coverage, said Archer.
“Even the discussions around property damage are not focusing on mom-and-pop shops who don’t have the financial support and resources that national retailers do,” she said.