Struggling small businesses confronted with looting, insurance questions
Policies generally cover physical losses, other claims connected to riots
Maher Najjar, a Boston-based small business owner, found his sneaker shop in shambles at 10 p.m. on Sunday night. He was a victim of nationwide protests that have turned to looting.
Police officers stand in front of a business with a demolished window in Boston, Sunday, following a march and gathering to protest the death of George Floyd, who died after being restrained by Minneapolis police officers on May 25. (AP Photo/Steven
“They looted the whole store, everything was destroyed,” Najjar told FOX Business Monday.
Windows were shattered, chairs were thrown and empty shoe boxes and hangers littered the inside of Sneaker Junkies, a store Najjar has been running with his business partner on Newbury Street for the past six years. Thousands of dollars in merchandise was stolen and neighboring stores on the street were also severely damaged.
Now, he’s waiting to hear back from his insurance company regarding coverage, and after having to shutter his storefront due to the coronavirus, he’s grappling with how he will afford the damages and if he'll be able to reopen.
“I don’t come from a rich family. I came to this country not as an American citizen and worked from the ground up,” Najjar, who is from Jordan originally, said.
Like Najjar, small businesses, family-owned restaurants, bars, and big companies nationwide are facing devastation because protests from people outraged in response to the police killing in Minneapolis of George Floyd have turned violent.
Businesses have been damaged, burglarized and set on fire and mom-and-pop owners are unsure of how to recover -- particularly for those who don’t have insurance.
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Typically, landlords require basic liability business insurance in most lease agreements to protect them against potential lawsuits. However, owners ultimately decide on how much they’re able to spend on insurance to cover the cost of their property such as inventory or equipment in case of an emergency.
Businesses usually have standard property insurance that will cover damage to their enterprise.
"If there is a business policy in force, vandalism and malicious mischief, fire, plat glass, and theft are covered," Joseph Gili, a New Jersey-based insurance agent said. "Unlike COVID-19, because you would have a direct physical loss, all coverages are subject to deductibles and limits on the policy."
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A business owner can also purchase business interruption insurance and file a claim for inventory or income lost specifically during instances like a riot, fire or vandalism. Business interruption insurance typically costs between $500 and $1,500 per year, although that number could be much more for high-value businesses, according to Insuron.com, an insurance company. But most small businesses may not have it.
“In the small business community, I would say between 20 to 30 percent of owners would have business interruption insurance. It’s costly when you’re starting a business -- there isn’t a whole lot of free money available, you put everything in your business it’s hard at times to figure out how to afford this,” Ron Willis, founder and president of the National Association of Business Owners and Entrepreneurs (NABOE), a D.C.-based nonprofit that supports business owners, said.
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Najjar, who has two other locations of the store in Connecticut and Rhode Island, was slated to re-open his Boston location Monday. Now hundreds of his customers are sharing prayers and pledges to support his business online until it can resume.
Najjar has been supporting peaceful protests but says those who have destroyed small businesses like his have a separate agenda.
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“This is not people standing for Black Lives Matter, the people who did this had an agenda to rob and steal. I don’t even think they’re part of the protest.”