Cover still available for mounting civil unrest but prices set to rise

Specialist strikes, riots and civil commotion (SRCC) insurers are still providing cover for the risk despite rising civil unrest around the world putting off property insurers, but buyers should expect to pay more for the protection, according to Chaucer.

The specialty insurer also said it expects SRCC risks and insurance lines to continue to grow as economies face post-Covid-19 challenges.

Chaucer said a rise in civil unrest, including the Black Lives Matter protests, means businesses are increasingly finding that damage or other losses caused by SRCC are not covered by their normal property insurance policy.

It added that the risk is set to be excluded from even more general property insurance policies as the Lloyd’s Market Association prepares a property wording to make it clearer still that these risks aren’t covered.

All this is creating demand for specialist insurance. Chaucer said SRCC insurers – which provide cover for loss or damages caused by riots, protests, strikes or other work-related unrest – are still stepping up to the plate and providing cover, but stressed that premiums are adjusting to reflect the heightened risk.

“A rise in civil protests globally has led to some international insurers excluding damage caused by these events from mainstream insurance policy. This process of removing cover was accelerated by the increase in global protests after the financial crisis, ranging from the Arab Spring to the Occupy Wall Street movement,” said Andrew Bauckham, head of political violence and crisis management at Chaucer.

“Insurers that specialise in this kind of insurance haven’t been put off by the protests of the last year. They will still provide cover even for some of the riskiest locations or businesses, but the insurance premiums will be adjusted accordingly,” he added.

Mr Bauckham said the rise in civil disturbances during the last decade is partly linked to austerity following the global financial crisis and volatile commodity prices impacting local economies.

But Chaucer thinks the impact of Covid-19 on businesses and government spending may present similar “challenging conditions for the foreseeable future”.

It also noted that the rise of civil unrest is being accelerated by a rapid evolution in social values, and spurred by social media.

“Social media allows protests to leap from city to city very rapidly and in the case of the Arab Spring movement, rapidly spread internationally, which creates a bigger risk that needs to be insured,” said Mr Bauckham.

Chaucer said Latin America is seen as a higher-risk location for unrest but recent large-scale protests in the US, France and Hong Kong show that risks are not limited to the more politically unstable or economically weaker countries.

Back to top button