Though the millions of protesters taking to the streets in recent weeks to protest George Floyd’s death have been largely peaceful, the pockets of unrest that broke out have led to fires, broken windows, and theft. For business owners, the good news is that the insurance industry is poised to pay for most of the losses—a different outcome than what resulted from coronavirus shutdowns, which saw many merchants denied coverage because of exclusions in their policies.
But whether stores and restaurants can recoup losses caused by looting and vandalism depends, of course, on their having adequate insurance coverage in the first place. And not all of them do.
In South Minneapolis, Bridget Schoffman started a GoFundMe page to help four immigrant-run small businesses that had been badly damaged by arson and looting. The businesses—a nursery service, an ice cream parlor, a grocer, and a wireless shop—are tenants in a building owned by her parents and had bare-bones insurance or none at all.
“The windows were broken, the doors were broken, their merchandise was stolen and looted. This is devastating for all of them and their families,” said Schoffman, calling special attention to Luis Tamay, the grocer who had opened his shop only weeks before and lost most of his inventory after vandals damaged his fridges and freezers.
The destruction of such businesses is obviously devastating for the owners but also for the communities they serve. When the likes of Target and Starbucks are hit by vandalism, they typically reopen days later—in part thanks to insurance—whereas inner-city businesses in low-income areas damaged during the same unrest may never open their doors again. The result is blight and a lack of services for communities that are often struggling already.
So why do businesses like Tamay’s lack insurance in the first place? While failing to purchase insurance does reflect a risk calculation by business owners, there are also larger economic and historical forces that have made it hard for those in underprivileged communities to obtain coverage in the first place.