Putting Your Insurance Coverage to Work for You in the Age of Protests and Civil Unrest

Authors: Stacie Kroll Dorothy Gjerdrum Shannon Gunderman Tony Abella Jr. Ania Caruso John Ergastolo

Civil unrest and protests can spread quickly and unpredictably. The murder of George Floyd in Minneapolis more than four years ago fueled protests around the globe and catalyzed the Black Lives Matter movement, which continues to engage in social actions to this day.

In the first half of this year, more than 160 higher education institutions have faced pro-Palestine protests and encampments on campus. Some have resulted in violent confrontations and engaged outside law enforcement agencies to control protesters. It's possible these protests may continue over the summer and into the fall.

We're also facing the likelihood of a contentious election process throughout the rest of this year. Preparations are already well underway for organizations that may be affected by resulting protests or unrest during the political conventions taking place in Chicago and Milwaukee this summer.¹

The US Crisis Monitor data project estimates that roughly 7% of protests result in violence.² While the likelihood of a negative impact on an organization is low, the impact could be significant, resulting in bodily injury, reputational harm and property damage. Recent case studies affirm that American society values the right to protest, and individuals will continue to exercise that right to ensure their voice is heard.

Predicting the tipping point for widespread social unrest is difficult in advance, but that should not deter you from understanding the landscape and preparing for what could happen.

This is not an issue affecting only universities and law enforcement agencies. Any company or local business may be the subject of a protest. Usually these are peaceful and might only generate local press coverage, but when demonstrations get out of hand or spread, neighboring homes and businesses can be affected.

All types of organizations need to understand when and how their insurance program can be triggered in the event of a protest or civil unrest. There are also several actions organizations can take to be more prepared in the event of a protest or civil unrest.

Protest and civil unrest insurance triggers

Property Insurance

Damage to property caused by protests or civil unrest may trigger coverage under property and/or terrorism insurance policies. This can include damage to buildings, equipment, inventory or other physical assets. Damages could also include business interruption coverage due to loss of use or access to premises. Traditionally, damage caused by civil unrest or protest is covered the same as all other covered property perils, unless specifically excluded.

General Liability and Umbrella/Excess Liability

An organization could be legally held responsible for bodily injury and/or property damage caused by protests or civil unrest if litigation is initiated or claim(s) are brought against the organization. This liability may encompass claims for personal injuries, damage to third-party property, and/or allegations of negligence. The standard of care that organizations are required to uphold is evolving due to several key factors, including regulatory changes, legal precedents, social expectations, and employee and public advocacy.

Workers' Compensation

If an employee is injured during protests or civil unrest while performing their job duties, workers' compensation insurance may be triggered. This coverage provides medical benefits, wage replacement and other related expenses for injured employees.

If an employee is injured while participating in a protest, the organization should consult with their counsel and evaluate whether the employee's actions constitute protected activity under the law. Moreover, who is considered an employee under workers' compensation laws varies by state due to state-specific definitions, regulations and interpretations of employment relationships; hence, an organization might be exposed to picking up a claim under the workers' compensation system they did not anticipate.

Management Liability Policies (MLP)

When an organization experiences a protest, whether it's against their operations or simply occurring on their premises, leadership must identify strategies to respond and de-escalate. There are several ways a claim can be brought against an organization that could trigger MLP.

• General decision making. Take a collaborative approach. While the decision to respond in any given way is made by the most senior leadership within the organization, those decisions should be made with information provided by various operational heads within the organization (legal, HR, safety and security, etc.). A sound decision can only be made when broad organizational representation is considered.
• Use of law enforcement. It may be advisable to coordinate the management of protest security with local law enforcement to ensure public safety and the de-escalation of any issues that may arise. Additionally, some policies may limit coverage for alleged civil rights violations by internal safety and security teams. Using local law enforcement to enforce laws and provide security can potentially insulate organizations from possible claims.
• Discrimination. Free speech. An organization should first review with counsel whether their actions would constitute a violation of a constitutional right to free speech. An organization's restriction on an individual person's constitutional rights to free speech could result in litigation, particularly when the group or person leading the protest identifies with a protected class. Such claims of discrimination based upon religious beliefs or ethnicity can trigger third-party discrimination coverage against the institution.
• Employment practices. Retaliation. Actual or alleged retaliation against employees is typically covered under Employment Practices Liability (EPL) insurance. Claims from employees who are alleged to have been fired because they were protesting or supporting the cause of protesters could be very costly. Retaliation claims are the single most expensive type of covered EPL claims.
• Due process. Publicly funded organizations have due process obligations through the disciplinary process. Parties may claim they have been subjected to a lack of due process, and they could demand a remedy to reverse their purported lack of due process. Or they could seek monetary damages, alleging that the lack of due process in their "punishment" has caused them hardship. The use of local law enforcement could reduce the likelihood of a due process claim.

Bundled services

Many policies include bundled crisis services, such as crisis communications expertise or threat assessment firms. Work with your broker to identify which bundled services may be included in your program and what triggers each of them.

• HOT TIP: Be on the lookout for strike, riot, and civil commotion exclusions in policies. Work with your broker to remedy potential gaps of coverage.