Liga Asuransi – Dear readers, how are you? I hope your business is running well as expected.
As always, this blog focus to discusses risk management and insurance. This time, we will discuss the risks of Riot Strikes, Malicious Damage, and Civil Commotion.
As a senior insurance broker, I want to discuss this topic in line with the political conditions in Indonesia at this time which is a bit hot because of the general election of parliamentary representatives and the presidential election to be held in the next couple of months; so, in today’s article, we will focus on social risks.
If you are interested in this article, please share this with your friends so they can understand as you do.
WHY RSCC and RSMD NEEDED?
In recent years, we have seen a rise in civil unrest worldwide, with protests, riots, and other forms of civil commotion becoming more frequent and violent. These events can have serious consequences for businesses and property owners, with damage to property, theft, and business interruption all potential risks.
As a result, companies must pay close attention to their insurance coverage, particularly regarding Riot Strike Malicious Damage (RSMD) and Civil Commotion (RSCC) insurance.
RSMD and RSCC insurance coverage protect against losses from riots, strikes, malicious damage, and civil commotion, including property damage, vandalism, theft, and business interruption losses. However, this coverage is not typically included in standard property insurance policies and must be added explicitly as a separate endorsement or policy.
With civil unrest on the rise, it is more important than ever for companies to consider their insurance needs and options carefully and to ensure they are adequately protected against potential risks. In this article, we will take a closer look at Riot Strike Malicious Damage and Civil Commotion insurance coverage and explore why companies need to pay attention to this important type of insurance coverage.
RSMDCC insurance coverage typically covers damage caused by riots, strikes, and civil commotion, such as property damage, vandalism, and theft. This coverage can also protect against business interruption losses resulting from these events, such as lost income and additional expenses incurred during the shutdown of a business due to damage.
Indonesia is a country that has experienced its fair share of civil unrest and political instability in recent years. Large-scale protests and demonstrations are not uncommon, and there is always a risk of these events turning violent and causing damage to property and businesses.
In 2019, for example, protests broke out nationwide in response to proposed changes to Indonesia’s criminal code. These protests quickly turned violent, with clashes between protesters and police resulting in damage to buildings, vehicles, and other property.
More recently, in 2020, Indonesia saw widespread protests and civil unrest following the passage of a controversial labor law. Once again, these events damaged property, including businesses and government buildings.
For companies operating in Indonesia, the potential risks of civil unrest and political instability cannot be ignored. While RSMD and RSCC insurance coverage can protect against these risks, it is important to carefully review the terms and conditions of the policy and ensure that coverage is adequate for the specific risks the business faces.
UNDERSTANDING RSCC and RSMD
Riot, Strike, and Civil Commotion (RSCC)
RSCC insurance covers damages to a business property resulting from riots, strikes, and other civil commotions. This type of coverage is essential for businesses in areas prone to civil unrest, such as cities with a history of protests and demonstrations.
Riot, Strike, and Malicious Damage (RSMD)
RSMD insurance, on the other hand, covers damages resulting from riots, strikes, and malicious acts of damage, such as vandalism, arson, and looting. This type of coverage is like RSCC but includes coverage for intentional acts of damage.
RSCC and RSMD insurance can help protect businesses from unexpected losses caused by civil unrest or malicious acts. It’s essential for business owners to carefully review their insurance policies to ensure they have the coverage they need to protect their property and assets.
DEFINITIONS OF RIOT, STRIKE, MALICIOUS DAMAGE, CIVIL COMMOTION
A riot is generally defined as a violent disturbance or uproar caused by a group of people in a public place, often involving force, vandalism, or destruction of property.
Riots can occur for various reasons, including political or social unrest, economic dissatisfaction, because of sports events, or other public gatherings that turn violent. The exact legal definition of a riot may vary by jurisdiction. Still, it generally involves individuals engaging in violent behavior threatening public safety and security.
In the insurance industry, a strike typically refers to a work stoppage or labor dispute involving employees and their employers. Specifically, strike insurance is a type of coverage that can protect a business against financial losses resulting from a labor strike, such as lost revenue or extra expenses incurred to keep operations running during the strike.
Strike insurance is often purchased by businesses that rely heavily on unionized workers, such as manufacturers or transportation companies, and want to protect themselves against the potential financial impact of a work stoppage.
It’s important to note that the specific coverage and terms of strike insurance policies can vary and may depend on factors such as the strike’s duration, the business’s size, and the industry’s nature. Business owners interested in purchasing strike insurance should carefully review policy terms and consult with their insurance provider to ensure they have the necessary coverage.
Civil commotion is a broad term to describe a public disturbance or violent unrest involving individuals and threatening public order and safety. Civil commotion can take many forms, including riots, protests, marches, and demonstrations.
In the insurance context, civil commotion is typically a covered peril in commercial property insurance policies and refers to damage to property resulting from violent public disturbances. For example, suppose a business property is damaged or destroyed during a riot. In that case, the owner may be able to file a claim for damages under their commercial property insurance policy with coverage for civil commotion.
The definition of civil commotion may vary by policy and jurisdiction. Still, it generally refers to individuals engaging in violent behavior that threatens public safety and causes property damage.
Civil commotion with political motives
Whether or not an insurance policy covers civil commotion related to political motives depends on the specific policy terms and the laws and regulations in the jurisdiction where the policy is issued.
Commercial property insurance policies may sometimes exclude coverage for damages from civil commotion related to political motives or unrest. For example, some policies may expressly exclude coverage for damages caused by acts of terrorism or war, which can be associated with political reasons.
However, other policies may cover civil commotion regardless of the underlying motivations behind the unrest. In some cases, policies may also offer optional coverage for damages resulting from acts of terrorism or other politically motivated violence.
Ultimately, the exact coverage available will depend on the policy terms and conditions, so it’s important for business owners to carefully review their insurance policies and consult with their insurance provider to understand their coverage options for civil commotion related to political motives or other forms of violent unrest.
Malicious damage, in the context of insurance, generally refers to intentional or willful damage caused by a person or group of people to someone else’s property. Malicious damage can take many forms, including vandalism, graffiti, arson, and theft.
For example, suppose a person intentionally sets fire to a business property, causing damage to the building and its contents. In that case, the property owner may be able to file a claim for damages under their commercial property insurance policy with coverage for malicious damage.
The exact definition of malicious damage may vary by policy and jurisdiction, but it generally refers to damage caused by an intentional and malicious act instead of accidental damage. It’s important for policyholders to carefully review their insurance policies and understand the specific coverage and exclusions related to malicious damage and the requirements for filing a claim in the event of such damage.
RSCC AND RSMD CASES IN INDONESIA
Indonesia has experienced civil unrest and political demonstrations in recent years, particularly in the capital city of Jakarta. In response to these events, many businesses have sought insurance coverage for RSMD and RSCC to protect against property damage or losses from civil commotion, strikes, and other types of unrest.
Insurance companies in Indonesia typically offer RSMD and RSCC coverage as part of a commercial property insurance policy and may also provide standalone policies for these coverages.
The terms, conditions, and exclusions of these policies can vary between providers and policies, so it’s important to carefully review the policy documents and ask your insurance provider any questions to ensure you have the right coverage for your needs.
Experience property damage or losses resulting from civil unrest, strikes, or other types of unrest. You may be able to file a claim under your RSMD or RSCC insurance policy to receive compensation for your losses.
However, the specific claims process and requirements can vary by provider and policy, so working closely with your insurance provider is important to understand the process and ensure a smooth claims experience.
WHY DO COMPANIES NEED INSURANCE BROKERS FOR RSCC AND RSMD INSURANCE COVERAGE?
Companies rely on insurance brokers to arrange their RSMD (Riot, Strike, and Malicious Damage) and RSCC (Riot, Strike, Civil Commotion) insurance policies for several reasons:
Expertise and Knowledge
Insurance brokers have specialized knowledge and expertise in insurance and risk management, including the specific coverages and policies related to RSMD and RSCC. They can help companies navigate the complex insurance market and ensure that they have the right range for their specific needs.
Access to Multiple Insurance Providers
Insurance brokers typically work with multiple insurance providers and can offer various coverage options from different insurers. This allows companies to compare and choose the best policies and rates for their needs.
Risk Assessment and Mitigation
Insurance brokers can help companies identify potential risks and exposures related to the civil commotion, strikes, and other types of unrest and recommend risk mitigation strategies and insurance solutions to help manage those risks.
In the event of a loss, insurance brokers can help companies file claims and advocate on their behalf with the insurance company to ensure a fair and timely claims process.
Working with an insurance broker can help companies save time and resources while ensuring they have the right coverage to protect against financial losses and damages from civil commotion, strikes, and other types of unrest.
One of the leading insurance brokers in Indonesia is L&G Insurance Brokers.
For all your insurance needs, please call L&G now!
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