Chubb has published a report on Strikes, Riots and Civil Commotion (SRCC) risks, which includes legal input from global law firm Kennedys and data from information, analytics and solutions specialists IHS Markit.
The report, “Confidence in Conflict: Insuring Your Business Against Civil Unrest”, analyses the current SRCC risk landscape and how it is evolving. It also considers some of the critical issues impacting both businesses and individuals in different parts of the world.
The last two years have been turbulent globally: The COVID-19 pandemic and its economic impact on individuals and businesses; the death of George Floyd that sparked civil unrest across the United States and beyond; plus increasing general unrest in many countries as seen most recently in Colombia and South Africa.
With much of the world experiencing political and social upheaval, multinational companies face a challenging risk landscape. Traditionally, insurers have offered SRCC protection at no extra cost. However, the increased frequency and severity of these risks means this is changing and property insurers have begun excluding events of social unrest from policies.
Consequently, risk managers need to ensure bespoke insurance programmes are in place to protect their balance sheets and assets. Using case studies, the report aims to open a much-needed dialogue with risk managers about the evolving risks, their SRCC protection needs and how to meet them within this complex and challenging environment.
The report is available here.
Piers Gregory, head of terrorism & political violence at Chubb Overseas General and co-author of the report said: “Episodes of social unrest in Europe, the Americas and Asia are rarely out of the news. As a result, we have all been able to see how isolated protests, demonstrations and other SRCC-type events can easily evolve into extended periods of upheaval. The causes and consequences of such events are many and varied and, as a result, they have put the complex issues of insurance coverage under the spotlight. Now, more than ever, insurance policies covering losses caused by civil protests and political uprisings need greater clarity and transparency to provide the coverage and certainty that clients demand. It is critical for companies to understand the limitations and exclusions which can affect the coverage of SRCC losses, as well as the specific risk exposures during events of civil unrest that will have an impact on their contracts.
“The purpose of this report is to reduce uncertainty, mitigate the risk of contested claims, and to ensure that risk managers, their businesses and assets are protected adequately through clear and understandable SRCC insurance covers.”
Patrick Foss, a partner at Kennedys, said: “Recent civil unrest events have brought into sharp focus the interpretation and application of traditional civil unrest perils typically seen in insurance policies. As always, clear policy drafting is of utmost importance. Insurers and policyholders alike must carefully consider the terms of their policies and how they are likely to respond to various scenarios. This report is a timely reminder of the dynamic risk environments policyholders operate in and the consideration that must be given to the insurance arrangements they have in place for those operations.”